STLA Stellantis NV

By Mauro Orru

The European Union's highest court scrapped an order from the bloc's executive arm for Luxembourg to recover up to 30 million euros ($30.1 million) in back taxes from Fiat Chrysler Automobiles NV, bringing an end to a long-running case over purported tax advantages.

The European Commission said in 2015 that Luxembourg had granted Fiat--now part of Stellantis NV--selective tax advantages that had reduced its tax burden since 2012 and ordered authorities in the small country to reclaim between EUR20 million and EUR30 million from the car maker. EU antitrust chief Margrethe Vestager said at the time that rulings to artificially reduce a company's tax burden contravened state aid rules in the bloc.

Luxembourg and Fiat lodged appeals before the General Court of the European Union, the bloc's second-highest court, hoping to annul the commission's order. However, the court upheld that order in a ruling issued in 2019.

The Court of Justice on Tuesday scrapped that decision, saying the General Court committed an error of law when it validated the commission's approach.

"The General Court was wrong to endorse the approach consisting in applying an arm's length principle different from that defined by Luxembourg law, confining itself to identifying the abstract expression of that principle in the objective pursued by the general corporate income tax in Luxembourg and to examining the tax ruling at issue without taking into account the way in which the said principle has actually been incorporated into that law with regard to integrated companies in particular," the Court of Justice said in a statement.

Ms. Vestager said the commission would carefully study the judgment and its implications. Stellantis didn't immediately respond to requests for comment.

Fiat Chrysler Automobiles NV and Peugeot-maker PSA Group merged in 2021 to create Stellantis.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

November 08, 2022 06:17 ET (11:17 GMT)

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