CJEU – Recent Developments in Direct Taxation 2022

S. 211Fiat vs Commission: A course reversal on Transfer Pricing and State Aid (?)

Werner Haslehner/Alexandros Politis

1. Introduction

The requirements of State aid law for transfer pricing within the European Union (“EU”) have been among the most discussed concerns in both tax law academia and practice since at least 2015. On 8 November 2022, the Court of Justice (“CJEU”) rendered the first final judgment on this subject matter. The first, that is, in the “modern era” of State aid law, which has been characterised by a more robust (or, depending one’s perspective: “aggressive”) application of State aid law to the taxation of multinational companies. This era has famously come about in the wake of a historical context in which financial crises, new transparency standards and Lux-Leaks revelations have invigorated a tighter scrutiny of multinational enterprises’ tax affairs.

The judgment is the first on the subject matter of transfer pricing by the EU’s court of last instance since Belgium and Forum 187 (2006). It is also the first judgment in a line of cases coming up from the General Court (“GC”) on the same or closely S. 212related matters (Starbucks, Apple, Amazon). Interestingly, Fiat was the o...