Thursday Fiat accused EU competition regulators of over-reaching their powers and acting as a supranational tax authority, reported Reuters. The cited the example of when the commission ruled against its tax deal with Luxembourg three years ago.
The Italian carmaker was hit with a tax bill of up to €30 million ($35 million) in 2015 after the European Commission said Luxembourg’s 2012 tax ruling cut the company’s taxes considerably, giving it an unfair advantage.
The EU antitrust regulator said the taxable profits for Fiat’s Luxembourg unit could have been 20 times higher under normal market conditions. Fiat and Luxembourg are challenging the ruling at the General Court, Europe’s second-highest.
Fiat complied with all the rules and was transparent in its dealings with the Luxembourg tax authority and yet it was punished, its lawyer Juan Rodriguez told a panel of five judges.
“Fiat feels like it’s been penalized by the Commission. Let there be no doubt, the Commission is trying to make new law in this case,” Rodriguez said.
“The Commission acted as a supranational tax authority even as a supernatural tax authority,” he said, adding the EU executive did not have the remit to do so.
Luxembourg, which on Wednesday was ordered to recover €120 million in back taxes from French utility Engie, marking the third case against the Grand Duchy, said the Commission was over-reaching its regulatory power.
“This strikes at the heart of member states’ sovereignty,” its lawyer Denis Waelbroeck told the court.
Full Content: Reuters
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