Luxembourg to appeal EU reprimand over Fiat tax scheme

Brussels (dpa) - Luxembourg is to appeal an EU finding that it granted illegal tax advantages to the financing arm of Italian carmaker Fiat, the country‘s Finance Ministry said Friday.The European Commission in October ordered Luxembourg to recoup 20 to 30 million euros (22 to 33 million dollars) from Fiat Finance and Trade, finding that a so-called tax ruling issued to the company had been inappropriate.Tax rulings are commonly used to provide companies with clarity on how their taxes will be calculated.But the commission found that profits were under-estimated in the 2012 Luxembourg tax ruling for Fiat Finance and Trade, which grants loans and bonds to other companies in the Fiat group.The Luxembourg-based company was thus taxed less than it should have been and its declared profits should have been 20 times higher, the commission said.But the Luxembourg Finance Ministry said on Friday that the European Union‘s executive had used "unprecedented criteria" in its findings, "thus putting into jeopardy the principle of legal certainty.""The commission has not established in any way that Fiat received selective advantages," it added, noting that a ruling on the matter by EU courts would provide "legal clarity and predictability on the practice of tax rulings."Both Luxembourg and Fiat have denied any wrongdoing.The commission issued a similar finding in October for a tax scheme that the Netherlands granted to the US coffee retailer Starbucks. The Hague has also announced that it will appeal.