Stellantis Portugal faced a tax audit questioning whether year-end transfer pricing adjustments, made to guarantee a minimum profit margin within the group, triggered VAT consequences under the Sixth VAT Directive. The Portuguese Supreme Administrative Court referred the matter to the ECJ, asking whether such profit reallocation constituted consideration for a supply of services. The European Court of Justice issued an interpretive ruling on the VAT treatment of intra-group transfer pricing adjustments in 2026 ... Read more

A Romanian subsidiary of a Belgian parent received invoices under a transfer pricing agreement to align profits within an agreed margin. Romanian tax authorities disallowed CIT and VAT deductions, citing insufficient proof of services rendered. The Romanian Court of Appeal referred questions to the European Court of Justice, which issued a preliminary ruling in 2025 on whether such year-end adjustments constitute taxable supplies under the EU VAT Directive ... Read more

A Romanian subsidiary of Arcomet Belgium received invoices under a transfer pricing agreement designed to keep profits within an agreed TNMM margin. Romanian tax authorities denied corporate tax and VAT deductions, citing lack of proof of service necessity. The Romanian Court of Appeal referred questions to the ECJ, prompting a 2025 Advocate General opinion on whether such year-end adjustments constitute taxable supplies under EU VAT rules ... Read more

A Romanian subsidiary of the Weatherford group was denied VAT deductions by Romanian tax authorities on payments for intra-group administrative services, including IT, HR, and marketing. The authorities argued insufficient evidence linked the costs to taxable transactions. The Romanian Regional Court referred the matter to the European Court of Justice in 2024 for a preliminary ruling on the correct interpretation of Articles 2 and 168 of the EU VAT Directive ... Read more

The Dutch Supreme Court referred a preliminary ruling request to the European Court of Justice asking whether the Netherlands' Article 10a anti-avoidance rule, which restricts interest deductions on intra-group acquisition loans by presuming artificial arrangements, is compatible with the EU freedom of establishment under Article 49 TFEU, even where loans are conducted on arm's length terms at market interest rates ... Read more

Ireland issued tax rulings in 1991 and 2007 allowing Apple subsidiaries to exclude IP licence profits from their Irish tax base. The European Commission found this constituted illegal state aid and ordered recovery. After the General Court annulled that decision in 2020, the Court of Justice reversed course in 2024, finding the Commission had sufficiently proved Apple received an unlawful tax advantage worth billions ... Read more

Belgian tax lawyers, bar associations, and accountants challenged national legislation transposing the EU DAC6 Directive, questioning whether mandatory reporting obligations for cross-border arrangements violated fundamental rights, equality principles, and legal professional privilege. The European Court of Justice issued a preliminary ruling in 2024 interpreting the validity of key provisions of Directive 2018/822, clarifying the scope of disclosure requirements across all tax categories ... Read more

A Dutch company was denied an interest deduction on an intra-group acquisition loan under Article 10a of the Dutch Corporate Income Tax Act, which presumes such arrangements are artificial. The Netherlands Supreme Court sought ECJ guidance on whether this restriction breaches Article 49 TFEU, particularly asking whether arm's length loans can still be treated as wholly artificial arrangements. The Advocate General issued an interpretive opinion in March 2024 ... Read more

The European Commission had concluded that Luxembourg granted Amazon unlawful State aid of around €250 million through a 2003 tax ruling endorsing inflated royalty payments to a non-taxable holding entity. The General Court annulled the decision in 2021, and the European Court of Justice upheld that annulment in December 2023, ruling the OECD Transfer Pricing Guidelines were not the applicable legal benchmark for assessing selective advantage under EU State aid rules ... Read more

Luxembourg and Engie challenged a European Commission decision finding that Luxembourg tax rulings granted illegal State aid by enabling double non-taxation of Engie group profits for nearly a decade. The General Court had sided with the Commission, ordering recovery of approximately €120 million. In December 2023, the Court of Justice set aside the General Court judgment and ruled in favour of Luxembourg and Engie, annulling the Commission's State aid decision ... Read more

Ireland issued tax rulings in 1991 and 2007 allowing Apple subsidiaries to exclude IP licensing profits from their Irish tax base. The European Commission found this constituted illegal State aid and ordered recovery. After the General Court annulled that decision in 2020, the Advocate General opined in 2023 that the General Court erred in law and proposed referring the case back for a new ruling on the merits ... Read more

A Spanish tax regime permitting deduction of goodwill arising from acquisitions of shares in foreign companies was challenged by the European Commission as illegal state aid. Spain and affected companies appealed the Commission's 2016 decision. The EU General Court annulled the Commission's decision in September 2023, ruling in favour of Spain ... Read more

Belgium operated a tax ruling system since 2005 allowing group companies to exempt 'excess profits' from corporate income tax. The European Commission found this constituted an unlawful state aid scheme and ordered recovery from 55 companies. After the General Court initially annulled the decision and the Court of Justice overturned that ruling, the EU General Court in 2023 ultimately upheld the Commission's position on remand ... Read more

Luxembourg issued a 2012 tax ruling endorsing a transfer pricing method for Fiat Chrysler Finance Europe's intra-group treasury services. The European Commission concluded this constituted incompatible State aid and ordered recovery. The General Court upheld the Commission, but the Court of Justice of the European Union set aside that judgment in November 2022, finding the arm's length principle had been incorrectly applied as the benchmark for normal taxation in Luxembourg ... Read more

A German Regional Tax Court referred questions to the European Court of Justice asking whether documentation requirements under Section 90(3) AO and surcharges under Section 162(4) AO, applicable only to foreign related-party transactions, breached EU freedom of establishment. The ECJ considered whether penalties for non-compliance exceeded what was necessary to prevent tax avoidance and preserve balanced taxation powers between Member States ... Read more

Ireland challenged the European Commission's use of the arm's length principle in EU state aid cases, arguing it breached legal certainty and equal treatment principles. The dispute arose from a 2012 Luxembourg tax ruling favouring Fiat Chrysler Finance Europe, which the Commission deemed unlawful state aid under Article 107 TFEU. In December 2021, the European Court of Justice Advocate General issued an opinion on the validity of applying the arm's length standard in state aid assessments ... Read more

The European Commission found that a 2012 Luxembourg tax ruling issued to Fiat Chrysler Finance Europe constituted unlawful state aid. After the General Court upheld the Commission's decision, Fiat appealed to the European Court of Justice. In a 2021 Advocate General opinion, the AG concluded the General Court's judgment should be set aside, finding that the arm's length principle had been incorrectly applied as the benchmark for normal taxation in Luxembourg ... Read more

Belgium operated a tax ruling system exempting excess profits of Belgian entities within multinational groups from corporate income tax since 2005. The European Commission found this constituted an unlawful State aid scheme in 2016. After the General Court annulled that decision, the European Court of Justice reversed the annulment in September 2021, restoring the Commission's finding and remanding the case for re-examination ... Read more

The European Commission opened a formal investigation in 2016 into whether Dutch tax rulings granted to Nike European Operations Netherlands BV and Converse Netherlands BV provided a selective advantage through reduced royalty-based taxation, breaching EU State aid rules. The EU General Court issued an interpretation ruling in 2021, examining whether the endorsed royalty calculation methods conferred unlawful benefits under Articles 107 and 108 TFEU ... Read more

Luxembourg granted Engie group companies tax rulings that enabled double non-taxation on nearly all profits for approximately a decade. The European Commission found this constituted illegal state aid under EU rules. The EU General Court upheld that finding in May 2021, confirming Luxembourg must recover around €120 million in unpaid taxes from Engie Treasury Management and Engie LNG Supply ... Read more

The European Commission had ordered Luxembourg to recover approximately €250 million in unpaid taxes from Amazon, arguing that a 2003 tax ruling unlawfully reduced Amazon EU's taxable profits by endorsing excessive royalty payments to a non-taxed holding entity. The EU General Court annulled the Commission's decision in May 2021, ruling that the Commission failed to establish that Amazon received an illegal State aid advantage under EU rules ... Read more

A Swedish company was denied deductions on interest expenses relating to an intra-group loan under Sweden's interest limitation rules, which blocked deductions where the main purpose was obtaining a tax advantage. The Swedish Supreme Administrative Court referred the matter to the ECJ, which ruled in January 2021 that the Swedish anti-abuse exception was incompatible with Article 49 TFEU on freedom of establishment ... Read more

The Advocate General delivered an opinion in December 2020 proposing that the Court of Justice set aside the 2019 General Court judgment in the European Commission's case against Belgium and Magnetrol International. The AG concluded that the Commission had sufficiently demonstrated that Belgium's practice of making downward profit adjustments for multinational group members constitutes an aid scheme under Article 1(d) of Regulation 2015/1589, finding the appeal well founded ... Read more

A Romanian branch of Italian company Pizzarotti lent funds to its parent at zero interest. Romanian tax authorities applied transfer pricing rules and issued an assessment based on a market interest rate. The European Court of Justice, ruling on a preliminary reference in 2020, found that applying arm's length interest rate rules to such intra-group loans was compatible with Article 49 TFEU and freedom of establishment ... Read more

The European Commission had ruled in 2016 that Ireland's tax rulings for Apple Sales International and Apple Operations Europe constituted illegal State aid, allowing Apple to pay far less tax than other businesses. Ireland and Apple challenged the decision. The EU General Court annulled the Commission's ruling in 2020, finding the Commission failed to demonstrate to the required legal standard that a selective economic advantage had been granted ... Read more

Luxembourg issued a tax ruling in 2012 endorsing a transfer pricing method for Fiat Chrysler Finance Europe's intra-group treasury services. The European Commission found the ruling constituted unlawful State aid incompatible with the internal market. Luxembourg and Fiat sought annulment before the EU General Court, arguing the Commission had effectively pursued disguised tax harmonisation. In 2019, the General Court upheld the Commission's decision, confirming the ruling conferred an unlawful advantage by departing from the arm's length principle ... Read more

The Netherlands granted Starbucks Manufacturing EMEA BV an advance pricing arrangement in 2008 governing its taxable profit and royalty payments to related entity Alki. The European Commission ruled in 2015 that this constituted incompatible state aid and ordered recovery. The EU General Court annulled that decision in 2019, finding the Commission had not established that the APA conferred a selective advantage on Starbucks BV ... Read more

A Portuguese arbitral tribunal referred a question to the European Court of Justice regarding the deductibility of interest costs following a reverse merger. The parent company had borrowed to acquire shares in its subsidiary, with those interest costs being deductible at parent level. The ECJ examined whether, under the EU Merger Directive, such costs become non-deductible at the level of the surviving subsidiary after the reverse merger ... Read more

A Swedish parent company sought to deduct losses from indirectly held Spanish subsidiaries upon liquidation. The Swedish tax authority challenged the deduction. The European Court of Justice ruled in 2019 that such losses are only deductible where all intermediate companies reside in the same state as the loss-making subsidiary, and losses cannot be deemed final if economic transfer to a third party remains possible ... Read more

A Swedish parent company sought to deduct losses from its loss-making German subsidiary following a cross-border merger. The Swedish tax authority challenged the deduction. The Court of Justice of the European Union ruled in 2019 that such losses are only deductible in Sweden if the parent proves it is impossible to utilise them in Germany, including through transfer to a third party, establishing key criteria for characterising losses as final ... Read more

Danish tax authorities withheld tax on dividends paid to Luxembourg and Bermuda conduit companies where the true beneficial owners resided outside treaty jurisdictions. The European Court of Justice, ruling in 2019 on joined Cases C-116/16 and C-117/16, confirmed that EU Member States may deny Parent-Subsidiary Directive exemptions where fraudulent or abusive arrangements are involved, fully supporting the Danish Tax Ministry's position ... Read more

Danish tax authorities levied withholding tax on interest payments made to conduit companies in treaty jurisdictions whose beneficial owners resided in non-treaty countries. The European Court of Justice, ruling in 2019 across four joined cases, confirmed that exemptions under the EU Interest and Royalty Directive may be denied where fraudulent or abusive avoidance is involved, finding that conduit intermediaries lacking true beneficial ownership cannot claim directive benefits ... Read more

The European Commission ordered Belgium to reclaim approximately €700 million from multinationals under its excess profit tax exemption scheme, finding illegal state aid. The EU General Court annulled the decision in 2019, ruling the Commission had wrongly classified the scheme as an aid scheme, since Belgian tax authorities retained discretion over essential elements and beneficiaries were not defined in a general and abstract manner ... Read more

Belgium operated an excess profits tax exemption allowing Belgian group entities to exclude profits attributed to group synergies from taxable income. The European Commission ruled in 2016 that this constituted unlawful state aid, ordering recovery. The EU General Court annulled the Commission's decision in 2019, finding against the Commission's state aid classification of Belgium's excess profit ruling scheme ... Read more

A Danish company sought to deduct final losses from its closed Finnish permanent establishment in its Danish tax return. Danish tax authorities disallowed the deduction under the territoriality principle. The European Court of Justice ruled in 2018 that denying deductions for final losses of foreign permanent establishments, while allowing them for domestic branches, violates Article 49 TFEU on freedom of establishment ... Read more

A German parent company provided loan guarantees to foreign subsidiaries without charge. German tax authorities imputed arm's length guarantee fees as income. The European Court of Justice, ruling in May 2018, held that German transfer pricing legislation was consistent with EU freedom of establishment and that shareholder status could constitute valid commercial justification for non-arm's length related-party transactions ... Read more

A German subsidiary of Hamamatsu Photonics sought customs duty refunds after a year-end downward transfer pricing adjustment under an APA reduced its effective purchase price. German customs refused, citing no allocation to individual goods. The European Court of Justice, ruling in 2017, held that an agreed transfer price composed of a provisional amount and a year-end adjustment cannot partially serve as a customs value under EU law ... Read more

Spain allowed companies to amortise goodwill arising from acquisitions of foreign shareholdings of at least 5% for corporate tax purposes. The European Commission found this violated EU state aid rules, but the General Court annulled that decision. In 2016, the European Court of Justice reversed the General Court, holding it had erred in law by imposing a supplementary selectivity requirement not supported by established case law ... Read more

A Belgian company was denied tax deductions for service costs paid to a related party established in a low-tax jurisdiction. The Belgian courts referred the matter to the European Court of Justice, which ruled in 2012 that Belgian legislation restricting such deductions was incompatible with Article 49 EC, as it imposed stricter conditions on cross-border payments than on equivalent domestic transactions ... Read more

A Belgian subsidiary paid interest to its Dutch parent company acting as director. Belgian tax authorities reclassified part of the interest as taxable dividends under rules that only applied to foreign-resident directors. The European Court of Justice ruled in 2008 that this difference in treatment between domestic and cross-border situations violated the freedom of establishment under Articles 43 and 48 EC ... Read more

The UK tax authority sought to include profits of an Irish subsidiary of Cadbury Schweppes in the UK parent's taxable base under controlled foreign company rules. The European Court of Justice held in 2006 that such rules restrict freedom of establishment and are compatible with EU law only where they target wholly artificial arrangements lacking genuine economic activity in the host member state ... Read more

A Dutch holding company sought to deduct financing costs related to its subsidiaries in nine EU Member States. The Netherlands tax authority disallowed the deduction because those subsidiaries were not taxed in the Netherlands. The European Court of Justice ruled in 2003 that this restriction violated the freedom of establishment under EC Treaty rules, deciding in favour of the taxpayer ... Read more