Commission Decision (EU) 2016/2326 of 21 October 2015 on State aid SA.38375 (2014... (32016D2326)
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
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