Belfast Telegraph

EU loses case on Starbucks 'sweetheart' tax deal

The US coffee giant won its legal fight yesterday against an EU demand to pay up to €30m (£26.4m) in Dutch back taxes
The US coffee giant won its legal fight yesterday against an EU demand to pay up to €30m (£26.4m) in Dutch back taxes

By Donal O'Donovan

EU Commissioner Margrethe Vestager's charge that Starbucks got a sweetheart tax deal from the Netherlands has collapsed.

The US coffee giant won its legal fight yesterday against an EU demand to pay up to €30m (£26.4m) in Dutch back taxes.

However, in a similar case, Fiat Chrysler lost its challenge against an order to pay a similar amount to Luxembourg - a win for the commission.

Both cases, along with the even more high profile €13bn (£11.5bn) Apple tax ruling, were part of European Competition Commissioner Margrethe Vestager's crackdown on tax rulings EU member states had provided to multinationals.

The Republic of Ireland and Apple have both appealed against the much bigger Apple tax case and lawyers for all three sides will closely examine the Starbucks and Fiat Chrysler decisions to assess any implications.

In its judgments the EU General Court, Europe's second-highest, endorsed the thrust of the European Commission's methodology in its tax actions but failed to show a tax advantage had been enjoyed by Starbucks.

Dimitrios Kyriazis, head of Law Faculty at New College of the Humanities London, said: "Regardless of the outcome of individual cases, the General Court seems to have sanctioned the commission's approach."

That is potentially a bad omen for Apple.

In Starbucks' case, the EU competition authorities failed to show that the coffee chain benefited unfairly from the Dutch tax deal, the court said.

"The commission was unable to demonstrate the existence of an advantage in favour of Starbucks," judges said.

The Dutch finance ministry said that the judgment showed that the multinational was treated the same as other companies in the Netherlands.

Starbucks welcomed the ruling, saying that it had not received any special tax treatment from the Dutch government and that it "pays all of its taxes wherever they are due".

In a separate ruling, the court upheld the commission's decision against Fiat's tax deal in Luxembourg, saying that the commission had applied its state aid rules correctly to assess if there was an illegal advantage and was not seeking to harmonise tax rules across the bloc, an argument cited by critics.

It agreed with the commission's finding that the Luxembourg tax ruling was selective and was not available to all companies, a key argument used by companies ordered to pay back taxes.

Belfast Telegraph

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