Luxembourg comments on the Commission’s decision in the ENGIE case

The Commission points out circumstances leading to an erosion of the tax base or even non-taxation. Luxembourg agrees that such results, albeit in accordance with the letter of the law, no longer correspond to the current spirit of the national and international tax framework.

Luxembourg stresses that it has cooperated fully with the Commission throughout its investigation and shares the Commission's objective of fighting harmful tax avoidance. Luxembourg is fully committed to the OECD BEPS project and has actively supported the adoption of the European Union’s ATAD directives, in the spirit of the level playing field. On June 15, 2018, the government has adopted a draft law implementing the ATAD directive into Luxembourg law and amending provisions of the tax code, with the aim of preventing situations such as those mentioned by the Commission.

The Commission has acknowledged the recent initiatives taken by Luxembourg in this area.

Nevertheless, as ENGIE has been taxed in accordance with the tax rules applicable at the relevant time, without having received a selective treatment, Luxembourg considers that ENGIE has not been granted State aid incompatible with the internal market, within the meaning of article 107(1) of the Treaty on the Functioning of the European Union.

Luxembourg will use appropriate due diligence to analyse the decision and reserves all its rights.

Press release by the Ministry of Finance