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EU: Rulings on Fiat and Starbucks could lead to billions in back taxes

 |  October 20, 2015

The coffee giant Starbucks and Italian carmaker Fiat are expected to feel the European Commission’s wrath this week over their sweetheart tax deals with Luxembourg and the Netherlands. The decisions are likely to be the first of a series by the commission, covering such companies as Apple and Amazon, who may find themselves paying billions in back taxes.

The commission’s powerful competition services could make their first announcement tomorrow, with Fiat facing around €150 million (£110 million) in tax repayments and Starbucks around €20 million.

With Margrethe Vestager, the EU’s competition commissioner, cancelling a scheduled visit to China citing pressing job-related matters, speculation is rife that the regulator is ready to announce the end of a two-year investigation into the preferential tax treatment from Dutch and Luxembourg authorities.

The commission said earlier this year that Starbucks may have avoided taxes when one of its Dutch units paid millions of euros to a UK-based arm of the company for a technique to roast coffee beans. Starbucks insists it complies “with all relevant rules, laws and OECD guidelines”, and pays a global effective tax rate of around 33 per cent. In Fiat’s case, the commission questioned Luxembourg’s arrangement with one of its units, Fiat Finance & Trade.

Full content: The Guardian

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