Sun, Nov 29, 2015 - Page 13 News List

Netherlands to appeal EU demand for taxes

TAX BREAKS:The Dutch government has said that it wants to make international agreements to increase transparency and work against tax avoidence by big business

AFP, THE HAGUE, Netherlands

The Dutch government on Friday said that it will appeal an EU ruling that Starbucks Corp must pay about 30 million euros (US$32 million) in back taxes for enjoying an “illegal” tax break.

In a major blow to sweetheart tax arrangements, Brussels said last month the deals the Netherlands had given to the US coffee giant and Luxembourg had awarded Italian automaker Fiat Chrysler Automobiles NV were illegal.

However, Dutch Minister of Finance Jeroen Dijsselbloem told ministers on Friday that the government disagreed with the European Commission’s ruling as well as its demand to reclaim two years of unpaid taxes from Starbucks.

“The government is of the opinion that the Commission does not convincingly demonstrate that the tax authority deviated from the statutory provisions,” he wrote in a letter to ministers. “It follows that there is no state aid involved.”

In what could be a potentially awkward move, the appeal comes as the Netherlands is due to take over the rotating six-month presidency of the EU on Jan. 1.

Dijsselbloem insisted his country was supporting the EU fight against tax avoidance by multinational companies.

He also voiced concerns that the Oct. 21 ruling would muddy the waters and lead to “uncertainty about how to enforce regulations.”

“The Netherlands wants to make international agreements in order to counter tax avoidance by increasing transparency and aligning different national systems in a better way,” he said.

The Dutch government was seeking “certainty” and therefore it “appeals the Commission decision in the Starbucks case,” he added.

A Ministry of Finance spokesman said that the appeal had not yet been lodged with the European Commission, but was expected to be filed in the next few weeks.

The EU argues that the rulings unfairly benefit larger companies at the expense of smaller, often less influential rivals, but Dijsselbloem insisted the Commission’s ruling “deviates from national law” as well as the recommendations of the Organisation for Economic Cooperation and Development (OECD).

“The Dutch practice is lawful and compliant with the international system of the OECD,” he said.

Starbucks has also said it plans to appeal the EU decision.

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