Industry & Business

Starbucks and Fiat ordered to pay huge EU back taxes

Starbucks and Fiat ordered to pay huge EU back taxes

Starbucks and Fiat ordered to pay huge EU back taxes
October 21
14:44 2015

The European Union is demanding that U.S. coffee chain Starbucks and carmaker Fiat repay up to 30 million euros each in tax breaks they received from EU nations, in a major ruling to cut down on sweet tax deals multinationals often shop for.

“All companies, big or small, multinational or not, should pay their fair share of tax,” said EU antitrust Commissioner Margrethe Vestager as she announced the ruling on Wednesday.

Luxembourg must recover a similar amount from Italian-US carmaker Fiat Chrysler Automobiles, she said. However, Fiat has denied receiving any aid from the Luxembourg state.

According to Ms Vesager Fiat’s taxes “would have been 20 times higher if calculations had been done at market conditions”.

Starbucks immediately said it would appeal, echoing the Dutch government in accusing the European Union executive of significant “errors” in its assessment.

Luxembourg, where much of the economy has been built on attracting multinational firms, said it disagreed and reserved its right to appeal.

Competition Commissioner Margrethe Vestager said “The decisions send a clear message. “National tax authorities cannot give any company, however large or powerful, an unfair competitive advantage compared to others. For most companies, especially the small and medium-sized, I hope this is a reassuring message.”

Further investigations into tax deals, including those covering Amazon and Apple, are continuing.

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