International Tax Review – Fiat finally won the case: TP takeaways from a decade of litigation – Viktoria Dimitrova and Alain Goebel

After almost 10 years of litigation, the European Court of Justice (ECJ) has finally settled the Fiat state aid case, clarifying an essential aspect of TP in the EU. The highest court concluded that only the domestic law of the relevant EU member state must be considered as a reference system when assessing whether an advantage constitutes an unjustified and hence selective derogation, which may lead to the recognition of an illegal state aid. The ECJ dismissed accordingly the Commission’s concept of a harmonised EU arm’s length principle, distinct from the OECD’s TP guidance and binding on the EU member states, irrespective of any domestic implementation.

Our experts Viktoria Dimitrova and Alain Goebel reflect on the conclusions that may be drawn from the FIAT state aid case for TP purposes.

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Content:

1. In the beginning

2. The Commission’s investigation

3. The General Court’s decision

4. The ECJ’s decision

5. In the end

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Viktoria Dimitrova

Senior Associate

Alain Goebel

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