In EU Tax Fight, Starbucks Wins but Fiat Loses
The EU's General Court ruled that Starbucks should not have been ordered to pay back taxes to the Netherlands. But it ruled that the commission was correct to order Fiat Chrysler to pay back taxes.
September 24, 2019 at 11:11 AM
3 minute read
The original version of this story was published on Law.com
|
Margrethe Vestager, the EU's antitrust czar, has suffered a partial setback in her drive to stop EU countries from granting sweetheart tax deals to multinational companies.
The EU's General Court ruled today that the commission was wrong to order Starbucks to pay €30 million ($33 million) in unpaid taxes to the Netherlands. In a separate judgment, it ruled that the commission was correct in ordering Fiat Chrysler Finance Europe to repay a similar amount to the Netherlands.
Responding to the rulings, Vestager, who has just been nominated for a second term as commissioner for competition, said in a statement: "All companies, big and small, should pay their fair share of tax. If member states give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU.
"Today's judgments," she continued, "give important guidance on the application of EU state aid rules in the area of taxation. At the same time, each case has its specificities and involves complex legal questions."
She said the commission would study the judgments carefully before deciding on possible next steps.
The commission has the right to appeal the court's ruling in the EU's Court of Justice, the bloc's highest court.
Vestager said the commission would "continue to look at aggressive tax planning measures under EU state aid rules to assess if they result in illegal state aid".
The court was ruling on two decisions taken by the commission in 2015: one against Starbucks and its tax arrangements in the Netherlands, and one for Fiat Chrysler Finance Europe in Luxembourg.
Both commission decisions were based on the argument that the companies benefited from special arrangements, granted by the tax authorities in the countries in which they were operating, which meant they paid lower taxes than their competitors.
In the case of Starbucks, the EU court found the commission had failed to prove that the company benefited from the tax arrangement.
For Fiat Chrysler Finance Europe, the court found that a ruling by the Luxembourg tax authorities approving arrangements did benefit the company compared to its competitors.
The companies and the governments that granted the tax deals have the right to appeal the court's decisions.
Vestager's drive to clamp down on EU governments granting sweetheart deals to multinational companies was a major part of her five years as commissioner for competition. She also ordered Apple to repay $14 billion in unpaid taxes to Ireland. A judgment in that case is expected in the coming months.
|Related reads:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllCarrier Legal Chief Departs for GC Post at Defense Giant Lockheed Martin
'This Trend Isn't Over': Law Firm Partner De-Equitizations Expected to Continue
Litigation Funder Behind Mastercard Case Says Settlement 'Struck Without Our Agreement'
Trending Stories
- 1Workers’ Compensation Appeals and New Procedure for Appeals to Superior Court in Georgia
- 2State Court Considers If Physician Can Be Held Liable for Lack of Tests, Treatment
- 3The Fall of Chevron Deference and the Future of the Courts
- 4NY Judicial Watchdog: Westchester County Trial Court Judge Tried to Interfere in Divorce Case on Behalf of Friend's Law Firm
- 5Professors Association Appoints New GC at Fractious Time
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250