Fiat Chrysler and Starbucks owe millions to the Dutch and Luxembourg government. According to the European Commission, a tax deal struck between Starbucks and the Dutch government in 2008 where it demanded between €20m (£15m, $23m) and €30m less in taxes from the coffee chain was deemed illegal.
In Luxembourg, Fiat Chryslers finance firm owes the government the same amount for tax exemptions. Competition policy commissioner Margrethe Vestager ruled both cases included unlawful state aids. Tax rulings that artificially reduce a companys tax burden are not in line with EU state aid rules. They are illegal, she said.
I hope that, with todays decisions, this message will be heard by member state governments and companies alike, Verstager added. All companies, big or small, multinational or not, should pay their fair share of tax. They are illegal. I hope that, with todays decisions, this message will be heard by member state governments and companies alike. All companies, big or small, multinational or not, should pay their fair share of tax.
According to Dutch media, the countrys secretary of finances, Eric Wiebes, has expressed his surprise at the ruling. The coalition government is looking into the case, arguing the deal struck did not break international rules.
In February, the exception made by the Dutch government for Starbucks was scrutinised by GreenLeft party member Jesse Klaver. Wiebes then promised he would give the Dutch House of Commons a clear and honest explanation of what happened in 2008.
Wiebes at the time also said he thought a Dutch investigation was unnecessary as the European Commission was already investigating the case.
Starbucks said it shares the concerns of the Dutch government that the commission has made significant mistakes in the ruling. In a statement, a spokesman said the firm is appealing the decision, claiming it followed Dutch and international rules from the Organisation for Economic Cooperation and Development.
The dispute between the European Commission and the Netherlands on which [OECD] rules Starbucks and other companies should follow could result in us having to pay taxes worth approximately €20m to €30m, on top of the $3m worldwide taxes we have already paid in the specific seven years (2008 - 2014), the statement read.
Fiat Chrysler Finance (FCF), meanwhile, denies any account of receiving any state aid from the Luxembourg government.
The intent of the [Advanced Price Agreement] was solely to clarify the transfer pricing rules to be applied by FCF to financing activities to affiliates, the firm said in a statement ahead of the ruling. FCF sought the APA for the sole purpose of obtaining legal certainty, through an application process governed by a clear legal framework.
A deal struck between Apple and the Irish government is still being investigated by the European Commission, which is clamping down on unlawful state aids to prevent unfair competition advantages.
