EU: Commission poised to combat Starbucks’ Dutch tax deals

It’s only been days since European Commission president Jean Claude Juncker defended against criticism that he holds a conflict of interest in the regulator’s investigation of member states’ tax relationships with companies. Recent reports say, however, that the Commission is poised to come down hard on those tax deals it finds to be anticompetitive.

The Commission made its preliminary findings in the probe public last Friday and revealed that it believes the Netherlands’ tax deals with Starbucks violate state aid and competition rules. The findings are just a small part of the investigation, which is also examining Amazon’s tax arrangements with Luxembourg and Apple’s agreements in Ireland.

It’s a high-profile, high-stakes case, experts say. Not only could companies be forced to repay money to the state, but findings that suggest those tax relationships were illegal could make those nations less attractive to foreign investment.

Following the Commission’s release of preliminary findings on Friday, Starbucks said it would continue to cooperate in the investigation and denied any wrongdoing in the matter. Authorities are concerned that offering foreign companies tax breaks could constitute illegal state aid and give that corporation an unfair advantage.

Commission President Jean Claude Juncker was faced with harsh criticism only weeks ago when investigative reporters released a trove of documents suggesting nations offered billions of dollars in tax cuts to international firms. Juncker, as the former Prime Minister of Luxembourg – which is being investigated as part of the case – was accused of holding a conflict of interest. But the policymaker was on the defense, vowing Wednesday to not interfere with Competition Commissioner Margrethe Vestager’s investigation but to make himself available to her if necessary and requested.

Full content: NYTimes

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