The decision, announced on Tuesday, means that the car maker will be expected to pay between €20 and €30 in unpaid taxes.

The matter began in 2014 with a year-long investigation into tax deals. In 2015, competition commissioner Margrethe Vestager called on Luxembourg to collect back taxes since a ruling it introduced in 2012. The Commission concluded that the taxable profits for Fiat's Luxembourg unit could have been 20 times higher under normal market conditions. The Luxembourg State appealed the decision leading to Tuesday’s judgment. At the time, finance minister Pierre Gramegna (DP) had said that it was “not justified”.

Responding in a press statement on Tuesday, the finance ministry wrote that the State would “analyse the judgment with all due diligence and reserves all its rights.”

It wrote:

“Fully committed to the fight against the erosion of the OECD tax base and the transfer of OECD profits (anti-BEPS plan), Luxembourg recalls that it has implemented numerous reforms in recent years to combat tax evasion and fraud, including an administrative circular regulating the activity of intra-group finance companies from a transfer pricing perspective. It will continue to participate actively and constructively in the ongoing discussions on international corporate tax reform, while respecting the principle of a level playing field.”

Luxembourg is also awaiting a decision after appealing in 2018 against a similar decision regarding Engie (formerly GDF Suez). Vestager said that tax rulings issued by Luxembourg authorities in 2008 and 2010 had artificially reduced Engie’s tax bill for a decade and ordered the State to recover €120m in back taxes. Luxembourg said it did not give selective treatment and insisted the ruling was in accordance with the tax rules in force at the time.

According to Reuters, the European Commission is in the process of investigation a Luxembourg tax ruling with Huhtamaki Oyj’s HUH1V.HE.

Also on Tuesday, the Court of the first instance ruled in favour of Starbucks concerning a similar challenge from the Commission regarding tax rulings with the Netherlands.

It said:

“The General Court annuls the Commission’s decision on the aid measure implemented by the Netherlands in favour of Starbucks.”