European court rejects EU order for Starbucks to pay $ 33 million in back taxes
European court rejects EU order for Starbucks to pay $ 33 million in back taxes as part of multinationals' approach to tax avoidance
- European Commission ordered Starbucks to pay $ 33 million in taxes in 2015
- It argued solid received and unfair advantage over rivals with a sweetheart deal
- The General Court ruled on Tuesday that the Commission could not prove its claim
- But it confirmed a similar case against Fiat Chrysler, which now has to cough up
Starbucks has been told that it does not have to pay back the Netherlands up to $ 33 million after a European court ruled it had not received an unfair advantage.
The case dates back to 2015 when the European Commission – the EU legislative body – accused Starbucks of artificially reducing its taxes as part of a crackdown on charity agreements between Member States and multinational companies.
But the Court, the second highest court in Europe, ruled on Tuesday that the EU & # 39; was unable to prove the existence of an advantage in favor of Starbucks & # 39 ;.
Starbucks has been told that it does not have to pay $ 33 million in arrears of tax to the Netherlands after the second highest court in Europe has ruled that it has not received an unfair advantage (file)
However, the same court ruled against Fiat Chrysler Automobiles, which now has to repay the same amount to Luxembourg.
The court found that the car manufacturer was illegally exempt from government taxes, which gave him an unfair advantage over his rivals.
Both the European Commission and Fiat Chrysler can now appeal the judgments of the Court of Justice of the European Union.
The results leave the future of another case with Apple – that has been ordered to pay more than $ 14 billion to Ireland – in the air.
The 2015 cases were the first in the crackdown by the EU antitrust supremo Margarethe Vestager against member states that had concluded tax agreements with multinationals.
In its important statements, Vestager said that the Dutch authorities should reclaim 30 million euros ($ 33 million) from Starbucks and Luxembourg from a similar amount from Fiat Chrysler.
In the new committee, she has been promoted to executive vice-president and will effectively become Europe & # 39; s czar for technical regulation, while still maintaining its powerful antitrust portfolio.
The case was one of the first cases of Margrethe Vestager, the so-called & # 39; Europe & # 39; s tax lady & # 39; s, investigating sweetheart agreements between European member states and multinationals
EU member states such as Belgium, Ireland, Luxembourg and the Netherlands have attracted multinationals for many years by offering extremely favorable tax deals to generate jobs and investments.
In all cases, authorities are accused of clinching multinationals that allow companies to move EU revenues abroad, which significantly reduced their international tax accounts.
Political indignation against such practices has increased following the financial crisis, increasing public resentment that the rich paid relatively little tax, while the general public was cut.
The issue hit close to home in 2014 with the LuxLeaks scandal, which showed that Luxembourg, Luxembourg's President of the European Commission, gave companies favorable tax deals while he was prime minister.
Luxembourg has also been commissioned by Brussels to recover 250 million euros from Amazon and 120 million euros from the French energy giant Engie.
The same court handed the commission a first setback in 2019, when it cast a decision on tax deal against Belgium, but mainly on procedural grounds. The committee resubmitted the case last week.
The committee is also investigating tax agreements with Ikea and Nike in the Netherlands. Brussels dropped a sharply watched case against McDonald & # 39; s.
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