Vestager loses Starbucks tax case, wins Fiat

Margrethe Vestager's October 2015 orders on Luxembourg and the Netherlands to each claw back between €20 million and €30 million in unpaid taxes from Fiat and Starbucks | Diarmuid Greene /Web Summit via Getty Images

Vestager loses Starbucks tax case, wins Fiat

‘All companies should pay their fair share of tax,’ Vestager had said when announcing the decision.

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The EU General Court Tuesday annulled a landmark European Commission decision qualifying a tax ruling granted to Starbucks as an illegal subsidy, but confirmed a similar decision involving Fiat.

The cases were the first big court test for Competition Commissioner Margrethe Vestager’s bold strategy of attacking preferential tax rulings for multinational companies by using her state aid powers.

The court agreed with the Commission’s assessment that the tax ruling Luxembourg gave to the financing company of Italian carmaker Fiat had artificially lowered its taxes. The Netherlands, however, was entitled to grant such a ruling to the coffee roasting company Starbucks, the court said.

Vestager’s October 2015 orders on Luxembourg and the Netherlands to each claw back between €20 million and €30 million in unpaid taxes from Fiat and Starbucks were the first of a series of eight similar decisions.

“All companies, big or small, multinational or not, should pay their fair share of tax,” Vestager had said when announcing the decisions.

This article is part of POLITICO’s new coverage of competition, antitrust, cartel and state aid issues. This coverage includes the Fair Play newsletter every Monday morning. Email [email protected] to request a complimentary trial.

Authors:
Simon Van Dorpe 

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