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Wednesday, October 21, 2015

EU Regulators Require That Starbucks, Fiat Pay Back Millions of Euros in Unpaid Taxes

http://www.wsj.com/articles/eu-rules-that-starbucks-fiat-benefited-from-illegal-tax-deals-1445419279

The European Union said it would require Starbucks Corp. and Fiat Chrysler Automobiles to pay tens of millions of euros in back taxes after ruling that tax deals they negotiated with two European governments were illegal, in an unprecedented decision by regulators that risks blowing open thousands of corporate tax structures across Europe.
The European Commission, the EU's executive arm, said Wednesday that tax deals granted to Starbucks in the Netherlands and Fiat in Luxembourg amounted to illegal state subsidies that must be repaid.
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The sums to be reclaimed are modest--amounting to between €20 million ($22.6 million) and €30 million for each company. And Wednesday's decisions are widely expected to be appealed at the EU's courts in Luxembourg, a process that can take years.
But experts said the probes have already created a chill in corporate board rooms across the continent. Hundreds, possibly thousands, of companies have used Luxembourg's holding-company rules to reduce their tax burden from the country's official 29% rate to almost nothing, according to documents disclosed last year by the Washington-ba

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