Italy’s Fiat need not pay $30 MLN in back taxes

An adviser to Europe’s top court stated that Italian carmaker Fiat Chrysler need not pay 30 million euros ($33.95 million) in back taxes to Luxembourg. The Fiat case was part of European Competition Commissioner Margrethe Vestager’s crackdown on deals between European Union countries and multinationals. In this, the highest profile of which were Apple’s Irish deal and Amazon’s Luxembourg deal.

Fiat Chrysler merged with Peugeot maker PSA earlier and rebranded itself Stellantis. They had challenged the EU tax order at the General Court but lost. It then appealed to the Court of Justice of the European Union (CJEU). Ireland, which last year won its fight against an EU tax order requiring it to recoup a record 13 billion euros in back taxes from Apple. They also appealed against the Fiat order. Pronouncing on both appeals, Priit Pikamae, advocate general at the EU Court of Justice, said that Ireland’s appeal against the EU tax order. This should be upheld and the Commission decision annulled.

Fiat need not pay the extra tax bill, even though the adviser said that Fiat’s appeal should be dismissed because of what he found unconvincing arguments. In its 2015 decision, the Commission said that Fiat Chrysler set prices for goods and services sold between subsidiaries, known as transfer prices. The CJEU, which usually follows four out of five such non-binding opinions, will rule in the coming months. The cases are C-885/19 P Fiat Chrysler Finance Europe v Commission and C-898/19 P Ireland v Commission.