Luxembourg and Ireland: Opinion of CJEU Advocate General regarding tax rulings issued to multinational entities

The CJEU judges now can begin their deliberations with judgment to be given at a later date.

Opinion of CJEU Advocate General regarding tax rulings issued to multinational entities

The Advocate General of the Court of Justice of the European Union (CJEU) today issued an opinion in appeals brought separately by Ireland and Luxembourg regarding tax rulings issued to multinational entity (MNE) groups.

The Advocate General proposed that the CJEU allow the appeal brought by Ireland, but annul the EC’s decision declaring aid which Luxembourg had granted to a taxpayer as being incompatible with the internal market. Read a release [PDF 253 KB] (16 December 2021) from the CJEU.

The cases are: Fiat Chrysler Finance Europe v. Commission (C-885/19 P) and Ireland v. Commission (C-898/19 P)


The Luxembourg tax authorities in 2012 issued a tax ruling in favor of a taxpayer, a member of the MNE group that provided treasury and financing services to the group companies established in Europe. The tax ruling endorsed a method for determining the taxpayer’s remuneration for those services, and this allowed the taxpayer to determine its taxable profit on a yearly basis for corporate income tax in Luxembourg. In 2015, the European Commission concluded that the tax ruling constituted state aid that was incompatible with the internal market. It also noted that Luxembourg had not notified the EC of the proposed tax ruling and had not complied with the standstill obligation. The EC found that Luxembourg was required to recover the unlawful and incompatible aid from the taxpayer.

Luxembourg and the taxpayer each brought an action before the General Court of the European Union for annulment of the EC’s decision. In its September 2019 judgment, the General Court dismissed the actions and confirmed the validity of the EC’s decision. Read TaxNewsFlash 

A judgment (July 2020) of the EU General Court annulled the EC's decision (August 2016) when the EC found that Ireland had granted illegal state aid to the taxpayer through selective tax breaks. The case relates to tax rulings granted by the Irish Revenue in 1991 and 2007 confirming the basis for the attribution of taxable profits to Irish branch operations of the multinational group companies. Read TaxNewsFlash

What’s next?

The Advocate General’s opinion is not binding on the CJEU. Rather, the role of the Advocate General is to propose a legal solution to the cases. The CJEU judges now can begin their deliberations on this matter with judgment to be given at a later date.

Read a December 2021 report prepared by KPMG’s EU Tax Centre



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