Opinion in Case C-451/21 P Luxembourg v Commission and in Case C-454/21 P Engie Global LNG Holding and others v Commission

Thursday 4th May 2023

Opinion in Case C-451/21 P Luxembourg v Commission and in Case C-454/21 P Engie Global LNG Holding and others v Commission

(State Aid)

By decision of 20 June 2018, the Commission found that Luxembourg had granted unlawful State aid to the Engie Group in the context of restructuring operations within Luxembourg.

The group had been promised tax treatment in tax rulings under which almost all profits generated by two subsidiaries in Luxembourg ultimately remained untaxed. This was because although at the level of the operating subsidiaries only a low level of taxation was applied on the basis of an agreed tax base, the parent companies benefited from the tax exemption for investment income (intercompany privilege).

This had granted the Engie group a selective advantage in derogation of Luxembourg tax law. This is because a corresponding correspondence principle (tax exemption at the level of the parent company only with prior taxation at the level of the subsidiary) can be inferred from national law. In addition, the tax authorities had unlawfully refrained from applying a provision to avoid abuses.

The EU General Court, seised by the Engie Group and Luxembourg, fully endorsed the Commission’s view and dismissed the claims. The Engie Group and Luxembourg then appealed to the Court of Justice.

Background Documents C-451/21 P

Background Documents C-454/21 P