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European Commission – Apple, Starbucks and Fiat

On 11 June 2014, the European Commission opened a formal investigation procedure and issued two formal notices concerning alleged State aid against Luxembourg; these address the practice here of advance rulings on tax matters and the regime of intellectual property taxation.

This initiative of the Commission follows extensive communication between the European Commission and the Luxembourg authorities over recent months during which the Luxembourg authorities had provided the European Commission with the relevant information. However, the Luxembourg authorities have expressed doubts about the legality of certain aspects of the requests for information from the European Commission and refused to deliver them.

Following the two orders of the European Commission to the Luxembourg authorities to provide such information, Luxembourg brought two actions for annulment of these injunctions, challenging their legal basis. According to Luxembourg’s Ministry of Finance, the European Commission has not provided any new evidence to dispel the serious doubts about the legality of the requests and the extent of the powers of the Commission.

The Ministry has also pointed out that the Commission does not question the legal principles applied by the Luxembourg tax authorities to give advance rulings based on requests by taxpayers seeking legal certainty as to the tax treatment of certain transactions. The Commission nevertheless considers that it cannot be excluded that the measures in question could constitute State aid in tax matters in individual cases.

The Ministry has confirmed that Luxembourg authorities are willing to engage in a constructive discussion with the European Commission on specific cases and on the basis of evidence available to the Commission. Therefore, in terms of the formal review process for alleged State aid, the Luxembourg authorities will respond to additional comments and detailed questions from the European Commission.


Written by Nicholas Martin – Coficom Trust S.à r.l. – Luxembourg