Illegal State Aid Allows For Lower Corporate Income Tax
A deal between Starbucks Corp’s and Dutch authorities may be illegal state aid as it allows the world’s biggest coffee chain to make payments on a lower corporate income tax base, European Union antitrust regulators said on Friday.
The comments by the European Commission came five months after it opened an in-depth investigation into the case involving the company’s Starbucks Manufacturing EMEA BV.
The probe is one of four into so-called sweetheart deals which the Commission said may give the companies an unfair advantage. The other three firms are online retailer Amazon, Italian carmaker Fiat and iPhone maker Apple.
“The Commission’s preliminary view is that the advanced pricing arrangements in favor of Starbucks Manufacturing EMEA BV constitutes state aid. The Commission has doubts about the compatibility of such aid with the internal market,” the European Union executive said.
The arrangements refer to the pricing for transactions between company subsidiaries, the main focus of all four investigations.