EU loses big Starbucks tax case, wins on Fiat

The cases can now be appealed at the EU's highest court, the European Court of Justice.

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An EU court on Tuesday annulled an order by Brussels that Starbucks pay €30m euros to the Netherlands, saying regulators had failed to demonstrate it received illegal state aid. In a separate decision, however, the same court said Fiat must pay roughly the same amount to Luxembourg, upholding a similar EU order from 2015, AFP reports. The cases can now be appealed at the EU's highest court, the European Court of Justice.

The split decision will be closely watched by Apple, which was ordered to repay Ireland €13bn in 2016 in a blockbuster case that is also making its way through EU courts.

"The general court annuls the commission's decision on the aid measure implemented by the Netherlands in favour of Starbucks," the statement said.

"The Commission was unable to demonstrate the existence of an advantage in favour of Starbucks," it added.

The cases from 2015 were the first out of the gate in the crackdown by the EU's anti-trust supremo Margarethe Vestager against Member States that had sealed sweetheart tax deals with multinationals. In her landmark rulings, Vestager said Dutch authorities must recoup unpaid taxes from Starbucks because it illegally allowed an elaborate tax set-up that allowed it to shift revenue abroad.

"I am pleased that the European Commission's case on Starbucks against the Netherlands on state aid has been clarified," Dutch Secretary of State for Finance Menno Snel said in a statement.

"This decision proves that the Dutch tax authorities treated Starbucks like any other company, and no better or different," he added.

The Starbucks and Fiat cases are dwarfed by the blockbuster order in 2016 that Apple repay Ireland 13 billion euros. That case drew global attention, helping Vestager become the EU's highest-profile official.

In the new Commission, she has been promoted to executive vice president and will effectively become Europe's tech regulation czar, while still holding on to her powerful anti-trust portfolio.

EU Member States such as Belgium, Ireland, Luxembourg and the Netherlands have attracted multinationals over many years by offering extremely favourable tax deals to generate jobs and investment. The issue hit close to home in 2014 with the LuxLeaks scandal which revealed that European Commission President Jean-Claude Juncker's native Luxembourg gave companies favourable tax deals while he was prime minister.

Luxembourg has also been ordered by Brussels to recoup €250m from Amazon and €120m euros from French energy giant Engie. The same court handed the Commission a first setback in 2019, when it threw out a tax deal decision against Belgium, but mainly on procedural grounds. The Commission last week refiled the case.

The Commission is also investigating tax deals with Ikea and Nike in the Netherlands. Brussels dropped a keenly-watched case against McDonald's.

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