BRUSSELS, Nov 15 (BSS/AFP): European Union regulators Friday publicly accused the Netherlands of awarding coffee-shop giant Starbucks unfair tax breaks, laying out their case at a time when such practices have fueled an uproar.
The EU's allegation that a sweetheart tax arrangement with Starbucks amounts to an illegal subsidy by the Netherlands joins similar arguments against Ireland with Apple and Luxembourg with Amazon and Fiat.
The complex case, sent to the Dutch government in June but made public Friday, comes a week after the shock revelation that Luxembourg allowed hundreds of top companies-including Pepsi, IKEA and Deutsche Bank-to enjoy such sweetheart deals.
That revelation put huge pressure on incoming commission head Jean-Claude Juncker, who led Luxembourg as prime minister for 19 years when the deals were made, and now presides over probes delving into them.
With attitudes sharpening over the tax affairs of multinationals, Juncker has faced sharp criticism over the deals, known as "tax rulings", including some calls for him to step down.
But Juncker has vowed to fight tax evasion as head of the EU's executive and promised to stay out of the handling of the probes against Amazon and Fiat, leaving all responsibility to Margrethe Vestager, the EU's competition chief.
The 40-page letter from EU regulators is addressed to then-Dutch Foreign Minister Frans Timmermans, who has since become Junker's right hand man as commission vice-president.
The legal argumentation formally sets out the reasons for opening an investigation into the Netherland's arrangements with Starbucks.
In it, the EU alleges that Starbucks, with stores worldwide, secured an arrangement that allowed the coffee bar chain to use a Netherlands subsidiary to shift revenue from higher-tax countries to lower-taxed ones.
It also sheds light on royalty payments made by the Dutch subsidiary to a UK-based entity that Brussels suspects are unjustified and a possible means of channelling money back to the Starbucks parent company in the US.
