CJEU magistrate sides with Engie in dispute over tax rebates in Luxembourg

A magistrate at the Court of Justice of the EU (CJEU) on Thursday spoke out in favour of French energy company Engie in a dispute with Brussels over controversial tax rebates in Luxembourg worth €120 million.

Advocate General Juliane Kokott proposed to the CJEU judges to annul the European Commission's decision that tax benefits granted to Engie were illegal state aid, according to a statement from the Luxembourg-based court.

The CJEU's ruling will be issued at a later date: the judges deliberating in the case are not bound by the advocate general's conclusions, it said.

Brussels had opened an in-depth investigation in September 2016 into "two financial arrangements" that allowed Engie to partially evade tax in Luxembourg.

€120 million – that Luxembourg does not want

This investigation targeted tax agreements made in 2008 and 2010 by the Grand Duchy with the energy supplier, for the benefit of two group companies established in the country: Engie LNG Supply and Engie Treasury Management.

In June 2018, the European Commission concluded that the Engie group had benefited from illegal tax advantages in Luxembourg and demanded that the Grand Duchy recover €120 million from the company of which the French state is the largest shareholder.

Engie and Luxembourg had initially referred the matter to the European Court of First Instance, which ruled in favour of the Commission and rejected their appeals. They then appealed to the Court of Justice, which is currently under review.

The European Commission has already suffered a series of defeats in similar cases. Carmaker Fiat (Stellantis Group) won a ruling from the CJEU in November to overturn a Brussels decision to repay €30 million in tax benefits to Luxembourg.

The Commission also lost to Apple, Amazon, and Starbucks in other tax disputes in Ireland, Luxembourg, and the Netherlands.