## [State aid and Tax Rulings: An appropriate way to tackle aggressive tax planning?](/en_GB/new/state-aid-and-tax-rulings-appropriate-way-tackle-aggressive-tax-planning)
# State aid and Tax Rulings: An appropriate way to tackle aggressive tax planning?
10 / 22 / 2015
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**In two decisions issued on October 21, 2015, the European Commission (EC) has concluded that, by issuing certain tax rulings covering transfer pricing matters, Luxembourg and the Netherlands have granted selective tax advantages to Fiat Finance and Trade and Starbucks, respectively.**
According to the EC, these tax advantages (rulings) are based in complex methodologies leading to the establishment of transfer prices with no economic justification and which unduly shift profits with the purpose of a reduction in taxes.
Furthermore, these rulings confer to the beneficiary companies an unfair competitive advantage over other companies (typically SMEs not belonging to a group of companies) that are taxed on their actual profits because they (necessarily) pay market prices. Therefore, they are illegal under EU State aid rules.
In these decisions, the Commission has ordered Luxembourg and the Netherlands to recover the unpaid tax from Fiat and Starbucks, amounting to €20 - €30 million per company. These companies can no longer continue to benefit from the advantageous tax treatment granted by these tax rulings.
The two decisions are appealable and will presumably be appealed against by the two Member States and the companies in question. They nevertheless confirm the potential state aid risk present in rulings.
We have prepared [a brief document](http://www.garrigues.com/sites/default/files/documents/state-aid-and-tax-rulings-tax-planning.pdf) from our head of the Brussels office, with his unique perspective on the matter.
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