INHALT

Commission Decision (EU) 2016/2326 of 21 October 2015 on State aid SA.38375 (2014/C ex 2014/NN) which Luxembourg granted to Fiat (notified under document C(2015) 7152) (Text with EEA relevance )

COMMISSION DECISION (EU) 2016/2326
of 21 October 2015
on State aid SA.38375 (2014/C ex 2014/NN) which Luxembourg granted to Fiat
(notified under document C(2015) 7152)
(Only the French text is authentic)
(Text with EEA relevance)
1.
PROCEDURE
2.
DESCRIPTION OF THE AID MEASURE
2.1.
Description of the beneficiary
Main cross-border Intra-group transactions
2.2.
The contested tax ruling
2.2.1.
The FFT APA
2.2.2.
The transfer pricing report
2.3.
Description of the Luxembourg rules on transfer pricing
2.3.1.
Article 164 of the Luxembourg Income Tax Code
2.3.2.
Circular L.I.R. No 164/2
2.4.
Description of the OECD guidance on transfer pricing
2.5.
Additional information submitted after the opening of the formal investigation procedure
2.5.1.
Luxembourg's Letter of 3 September 2014
2.5.2.
Luxembourg's Letter of 24 March 2015
2.5.3.
Fiat's Submission of 31 March 2015
2.5.3.1.
Information on Fiat group companies in direct relation with FFT
2.5.3.2.
Detailed information on FFT's assets and liabilities
2.5.3.3.
Information on the Fiat group's transfer pricing policy
2.5.4.
Luxembourg's Letter of 10 July 2015
3.
GROUNDS FOR INITIATING THE PROCEDURE
4.
COMMENTS FROM LUXEMBOURG
4.1.
Comments from Luxembourg on the Commission procedure
4.2.
Comments from Luxembourg on substantive errors in the Opening Decision
5.
COMMENTS FROM INTERESTED PARTIES
5.1.
FFT's first set of comments
5.1.1.
Misapplication of the OECD principles
5.1.2.
The Commission's selectivity analysis
5.2.
FFT's second set of comments
5.2.1.
The APA does not confer an ‘advantage’
5.2.2.
Lack of selectivity
5.2.3.
FFT's factual situation differs substantially from the decisions on Coordination Centres
6.
COMMENTS FROM LUXEMBOURG ON THIRD PARTY COMMENTS
7.
ASSESSMENT OF THE CONTESTED MEASURE
7.1.
Existence of aid
7.2.
Existence of a selective advantage
7.2.1.
Determination of the reference system
7.2.1.1.
Reference system composed of the general Luxembourg corporate tax system
7.2.1.2.
Article 164(3) L.I.R., the Circular and/or the relevant administrative practice do not constitute the appropriate reference system
7.2.2.
Selective advantage due to a derogation from the general Luxembourg corporate income tax system
7.2.2.1.
Selective advantage resulting from a deviation from the arm's length principle
7.2.2.2.
Preliminary observation: doubt expressed on the existence of a fixed tax base
7.2.2.3.
Methodological choices, parameters and adjustments underlying the contested tax ruling
7.2.2.4.
The choice of the TNMM and the functional analysis in the transfer pricing report
7.2.2.5.
The amount of capital to be remunerated
7.2.2.6.
The use of FFT's hypothetical regulatory capital as profit level indicator
7.2.2.7.
The inconsistent application of the Basel II framework to calculate that capital
7.2.2.8.
Inappropriate deductions from the capital to be remunerated
7.2.2.9.
The level of required return applied to the capital to be remunerated
7.2.2.10.
Conclusion on the amount of capital to be remunerated and level of required return on that capital
7.2.3.
‘Group advantage’
7.2.4.
Subsidiary line of reasoning: Selective advantage due to a derogation from Article 164 L.I.R. and/or the Circular
7.2.5.
The Commission has not identified any consistent tax ruling practice under the Circular that could constitute an appropriate reference system
7.2.5.1.
The Circular is drafted too broadly to constitute an appropriate reference system
7.2.5.2.
Luxembourg's tax ruling practice is too inconsistent to constitute an appropriate reference system
7.2.6.
Justification by the nature or general scheme of the tax system
7.2.7.
Conclusion on the existence of a selective advantage
7.3.
Beneficiary of the contested measure
7.4.
Conclusion on the existence of aid
8.
COMPATIBILITY OF THE AID
9.
UNLAWFULNESS OF THE AID
10.
RECOVERY
10.1.
Legitimate expectations and legal certainty
10.2.
Methodology for recovery
10.3.
Entity from which the aid is to be recovered
11.
CONCLUSION
Article 1
Article 2
Article 3
Article 4
Article 5