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UPDATE 2-EU manners Starbucks, Fiat taxation deals are illegal

UPDATE 2-EU manners Starbucks, Fiat taxation deals are illegal

* Fiat, Starbucks probable for 20-30 mln euros in behind taxes

* Decision opposite Dutch, Luxembourg sets fashion for

* Vestager says firms had foul low rates compared to

(Adds reaction, quotes, background)

By Foo Yun Chee and Philip Blenkinsop

BRUSSELS, Oct 21 (Reuters) – The European Commission ruled
on Wednesday that Starbucks and Fiat benefited from bootleg tax
deals with a Dutch and Luxembourg governments, in cases with
major implications for a taxation of multinational companies.

Antitrust commissioner Margrethe Vestager pronounced all firms
must compensate a “fair share” and systematic a Netherlands to recover
20-30 million euros ($23-34 million) in behind taxes from a U.S.
coffee emporium chain. Luxembourg contingency redeem a identical volume from
Italian-U.S. carmaker Fiat Chrysler Automobiles, she

Starbucks immediately pronounced it would appeal, echoing
the Dutch supervision in accusing a European Union executive of
significant “errors” in a assessment. Luxembourg, where much
of a economy has been built on attracting multinational firms,
said it disagreed and indifferent a right to appeal.

Fiat denied receiving any assist from a Luxembourg state.

Vestager, a Dane who has denied accusations of anti-American
bias in rising other taxation probes into Apple and
Amazon and foe inquiries into Google, took care
to equivocate intruding on EU governments’ envy rhythmical rights
to set their possess taxation rates. The issue, she stressed, was firms
being treated differently within a same inhabitant system.

“The decisions send a transparent message,” she told reporters in
Brussels. “National taxation authorities can't give any company,
however vast or powerful, an astray rival advantage
compared to others. For many companies, generally a tiny and
medium-sized, we wish this is a calming message.”

The Commission pronounced Starbucks benefited from a taxation statute —
an declaration of destiny taxation levels — from Dutch authorities in
2008 and Fiat from a statute in Luxembourg in 2012. It concluded
that a taxable increase for Fiat’s Luxembourg section could have
been 20 times aloft underneath normal marketplace conditions.

The accurate volume of taxation to be recovered contingency now be
determined by Luxembourg and a Netherlands on a basement of the
Commission’s methodology.

Marc Sanders of taxation advisers Taxand pronounced a statute would
“rock a corporate universe to a really core”.

“Whilst multinationals were lured to EU states with offers
of low taxation rates as an incentive, small did they know that,
despite carrying agreement during a top inhabitant level, this
would come behind and punch a decade later,” he said.


Warning that “we do not stop here”, Vestager described the
cases of Apple in Ireland and Amazon in Luxembourg, where the
Commission also suspects a companies of benefiting from
illegal state subsidies around a taxation system, as “very different”.
She declined to contend when she would order on them.

Inquiries are also stability into a Belgian government’s
treatment of dozens of unclear companies.

“More cases might come if we have indications that EU state
aid manners are not being complied with,” she warned, while noting
that there was a broader EU and tellurian attempt, concurrent by
the abounding nations’ bar a OECD, to moment down on taxation avoidance
using synthetic money flows by ultra-low taxation regimes.

“We can't grasp satisfactory taxation foe in Europe with
enforcement of EU state assist manners alone. We can't do it alone,”
Vestager said. “The quarrel opposite taxation semblance and taxation avoidance
can usually be won with a multiple with coercion of state aid
rules and legislative responses.”

Special deals that condense multinationals’ taxation bills to little
more than 0 in some cases have come underneath closer inspection as
governments onslaught with disappearing revenues.

Vestager pronounced that Fiat’s Luxembourg section paid “not even”
0.4 million euros in corporate taxation final year and Starbucks’
Dutch auxiliary reduction than 0.6 million euros.

Starbucks pronounced it paid an normal tellurian effective taxation rate
of about 33 percent.

“Starbucks shares a concerns voiced by a Netherlands
government that there are poignant errors in a decision,
and we devise to interest given we followed a Dutch and OECD rules
available to anyone,” a orator said.

Commission President Jean-Claude Juncker has deserted calls
for him to renounce since a Luxembourg taxation complement was
developed during scarcely a quarter-century he served as his
country’s financial apportion and primary minister.

Since holding adult a EU post a year ago, he has pronounced the
Commission will work to turn a general personification margin in
corporate taxation.

(Additional stating by Robert-Jan Bartunek and Alastair
Macdonald; Editing by Catherine Evans)

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