► Date : Nov 08, 2022

The European Union's highest court overturned a 2015 tax ruling against Fiat Chrysler, dealing the bloc's regulators a new setback in a crackdown on multinational corporations' efforts to financially shield their operations.

Similar reversals have occurred in tax cases involving Apple Inc., Amazon.com Inc., and Starbucks Corp.

The European Court of Justice's ruling against the European Commission on Tuesday overturns a ruling in the commission's favour from the EU's second-highest court, the General Court, in 2019. In the other three cases, the court had ruled against the commission. The commission has taken the Apple and Amazon rulings to the European Court of Justice.

The decision is a setback for Commission Executive Vice President Margrethe Vestager, who is leading a campaign to rein in some of the world's largest tech companies' alleged excesses. Ms. Vestager's tax cases were among her first major salvos against tech companies in her new role as EU Competition Commissioner. She later fined Alphabet Inc.'s Google three times for alleged dominance abuses. Those cases were appealed by the company.

Ms. Vestager stated that the commission would investigate the decision and its implications. "The commission is committed to continuing to use all of the tools at its disposal to ensure that fair competition in the single market is not distorted by member states' illegal tax breaks to multinational corporations," she said.

Tax cases like those brought by the commission are one of the reasons why nearly 140 countries agreed last year to establish a global minimum corporate tax of 15%. The implementation of that agreement is stalled due to review and approval by the countries involved, including the EU's 27 members.

In 2015, the commission ruled that Fiat Chrysler, which is now part of Stellantis NV, benefited from an illegal tax deal granted to the company in Luxembourg. The commission stated at the time that the transaction amounted to a state subsidy and ordered the Luxembourg government to recover approximately $30 million from the company.

The lower court's analysis of the case, "and by extension, the existence of a selective advantage" to Fiat Chrysler, is incorrect, according to the Court of Justice.