More reports on: Starbucks Corporation

Starbucks, Netherlands accused of making unfair tax deal

15 November 2014

A Dutch unit of Starbucks paid millions of euros to a UK-based arm of the company that was not taxed in the UK in exchange for a technique to roast coffee beans, Bloomberg reported.

According to the EU, exaggerated tax-deductible royalty payments for the technique might have allowed Starbucks to unfairly lower its Dutch taxes. The EU said it continued to probe sweetheart fiscal deals for multinationals.

Starbucks's Alki arm, based in the UK, collected royalty that ''fluctuates from year to year and is not in line with sales,'' a European Commission letter posted on its website yesterday outlined the case to Dutch officials.

The royalty payments from Starbucks Manufacturing EMEA in the Netherlands increased from 1 million in 2010 to 12 million  in 2011.

The EU was targeting tax deals throughout the 28-nation bloc that might have given companies unfair advantages over competitors. Apple's Irish taxes are under scrutiny alongside accords for Amazon and Fiat Finance & Trade in Luxembourg.

''I don't think it's in anyone's interest that multinationals skip paying taxes anywhere by moving around profits and costs,'' Dutch finance minister Jeroen Dijsselbloem told reporters in Brussels Thursday. ''We should develop international standards if we lack them.''

According to the commission, tax avoidance and evasion in the EU cost about 1 trillion a year.

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