European Commission Investigates Starbucks’ Dutch Tax

European Commission Investigates Starbucks’ Dutch Tax

International pandemonium, in relation to sugary deals in-between governments and multinational companies has of late caught the notice in several occasions. In a latest stint the European Commission has announced a comprehensive investigation of Starbucks' Dutch companies.

The EU's competition authority has accused the Dutch tax establishment of providing Starbucks with illegal state aid by permitting the coffee chain to shell out lesser taxes in European with the assistance of intricate corporate structures.

During the summer months an inquiry was launched investigating the tax arrangement between Starbucks and the Netherlands. This process was done as a boarder review of deals that involved some companies from Ireland and Luxembourg which also included Apple, Fiat and Amazon.

The commission has raised certain issues with the Dutch authorities that are in similar lines with the issues that are being investigated in relation to Apple's tax deal with Ireland. It also includes matters like ones that are related to intellectual property.

Moreover, both the investigations are in connection with transfer pricing arrangements, through which companies distribute their diverse activities into different companies located in different countries, distributing costs to each which permits the ones which fall under the jurisdiction of higher-tax slabs to counterbalance those costs. In some cases this is done to transfer the profits to places that are considered tax-havens.