Roger Fingas
The European Union has ruled that Fiat Chrysler and Starbucks must each pay up to 30 million euros, or about $34 million, in back taxes — Â a decision that could foreshadow similar findings against Apple and Amazon.
Fiat and Starbucks were both determined to have received tax rulings from Luxembourg and the Netherlands that constituted state aid — something illegal under EU regulations, competition commissioner Margrethe Vestager told Bloomberg. The governments of both countries must now recalculate taxes using a method provided by the European Commission, though they have expressed surprise and disappointment with the decision.
Starbucks announced its intention to appeal, claiming that there were "significant errors" in the ruling and that it followed Dutch and OECD (Organization for Economic Co-operation and Development) rules. Fiat simply insisted that it didn't receive any state aid, while dismissing the amount of taxes it might pay as "immaterial" to financial results.
Apple and Amazon are also under scrutiny for how much they might owe. Vestager commented that any back taxes likely wouldn't be "spectacular," but would still be "much much more than what has previously been paid."
Various multinational corporations, including Apple, are known to exploit tax loopholes and deals in European countries. Apple funnels much of its international revenue through Ireland for that reason, though the Irish government is planning to close some loopholes, and could face an EU ruling against state aid by the end of 2015.
Charles Martin
Malcolm Owen
Andrew O'Hara
William Gallagher
47 Comments
Failing to see how tax laws that are changed should mean a company owes money from the past. That's stealing.
[quote name="9secondko" url="/t/189650/eu-rulings-against-fiat-starbucks-tax-breaks-could-foretell-apple-paying-back-taxes#post_2793901"]Failing to see how tax laws that are changed should mean a company owes money from the past. That's stealing.[/quote] Laws didn't changed
I'm not sure I get how this can be retrospective, but at the same time, there are very real problems with corporate tax laws, that allow companies that do a significant amount of business internationally, to work their tax affairs in a way that seems unfair. I think there will come a time when corporate tax will have to move towards zero as a result of this being almost impossible to resolve, and the majority of taxation will need to come from consumption tax (i.e. Value Added Tax).
Interpretation certainly is. But I guess that's what the EU loves to do; punish US companies (Fiat's moving to the US)
[quote name="TheWhiteFalcon" url="/t/189650/eu-rulings-against-fiat-starbucks-tax-breaks-could-foretell-apple-paying-back-taxes#post_2793916"] Interpretation certainly is. But I guess that's what the EU loves to do; punish US companies (Fiat's moving to the US) [/quote] Interpretation also didn't changed. And do you have any support for the claim that EU loves to punish US companies? By the way,FIAT is not moving to the US.