EU Commission probe concludes: Amazon (AMZN.US), Fiat, Starbucks (SBUX.US) did not get illegal tax breaks
1min read The European Commission on Thursday announced that it had completed its national aid investigations into Luxembourg and the Netherlands' tax rulings granted to Amazon (AMZN.US), Fiat and Starbucks (SBUX.US), respectively, and confirmed that the companies did not receive selective tax advantages that violated EU state aid rules. The Commission had previously said Luxembourg's tax rulings granted to Fiat and Amazon and the Netherlands' tax ruling granted to Starbucks violated EU state aid rules in 2015 and 2017, but those decisions were later overturned by the European Court of Justice.
The Commission has been investigating tax rulings granted by member states under EU state aid rules since 2013. The rules say that tax rulings that merely confirm that a tax arrangement complies with relevant tax laws are not problematic, but tax rulings that provide selective advantages to specific companies can distort competition within the EU's single market and thus violate the rules.
Specifically, in October 2015, the Commission found that Luxembourg's 2012 tax ruling provided Fiat with a selective advantage, reducing its tax burden by an estimated €20 million to €30 million since 2012. However, in November 2022, the European Court overturned the Commission's decision to uphold the ruling, stating that the Commission had used the wrong parameters in its investigation.
Similarly, in October 2015, the Commission also found that the Netherlands' 2008 tax ruling granted to Starbucks provided it with a selective advantage, reducing its tax burden by an estimated €20 million to €30 million since 2008. However, in September 2019, the General Court overturned the Commission's decision, finding that the Commission had failed to prove that the Netherlands had granted Starbucks a selective advantage through its tax ruling.
Moreover, in October 2017, the Commission found that Luxembourg's 2003 tax ruling (extended in 2011) had improperly reduced Amazon's tax payments in Luxembourg by about €250 million. However, in May 2021, the General Court overturned the Commission's decision, finding that the Commission had failed to prove the existence of a selective advantage. In December 2023, the Court again confirmed this overturned decision.
