Fiat Chrysler Automobiles on Thursday alleged EU competition regulators of over-reaching their powers and acting as a supranational tax authority for the bloc when they ruled in opposition to its tax deal with Luxembourg three years ago.
The Italian automaker was hit with a tax bill of up to 30 million euros ($35 million) in 2015 following the European Commission’s statement that Luxembourg’s 2012 tax ruling cut the company’s taxes considerably, providing it an unfair advantage.
The EU antitrust regulator stated the taxable profits for Fiat’s Luxembourg unit could have been 20 times bigger under normal market conditions. Fiat and Luxembourg are opposing the ruling at the General Court, Europe’s second-highest.
Fiat complied with all the regulations and was clearly transparent in its dealings with the Luxembourg tax authority and yet it was punished, its lawyer Juan Rodriguez informed 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 stated.
“The Commission acted as a supranational tax authority even as a supernatural tax authority,” he stated, adding the EU executive lacks the remit to do so.
Luxembourg, which this week was ordered to recover 120 million euros in back taxes from French utility Engie, marking the third case against the Grand Duchy, stated the Commission was over-reaching its regulatory power.
“This strikes at the heart of member states’ sovereignty,” its lawyer Denis Waelbroeck informed the court.
“We are here to put a stop to the arbitrary nature of this. We need to prevent the Commission merely enforcing its ideas on the case that comes along without having the legal basis,” he stated.