CJEU - Recent Developments in Direct Taxation 2021

S. 981. Introduction

The present chapter discusses three cases from Luxembourg, all emerging from Luxembourg’s highest administrative court (Cour administrative). The first two (Amazon and Engie) examine the compatibility of Luxembourg’s domestic law with state aid rules. The third one (État luxembourgeois v L) relates to the taxpayers’ fundamental rights.

2. The Amazon Case (T-816/17 and T 318/18)

2.1. Introduction

This judgment is the last in the series of high profile cases brought by the Commission claiming that Ireland, the Netherlands and Luxembourg had each violated state aid prohibition rules by supporting multinational companies to shift profits by way of granting them tax rulings. With a slight variation from the Apple case, which concerned the attribution of profits to a permanent establishment in Ireland, all of these circled around the question of the correct application of transfer pricing rules in light of EU State aid law.

With the exception of the Fiat case, the Commission has been on the losing side in all of them before the General Court (“GC”). and even in that latter case, the Advocate General has recently proposed that the CJEU hand a victory to Luxembourg. Nevertheless...