Starbucks Tax Affairs: EU’s Investigation hints at Company involvement in Illegal State Aid

European Union carried out an investigation into tax documents of Starbucks in Holland. The investigation has led the EU officials suspect that there could be an illegal state aid.

The European Commission, the bloc's executive body, has sent a 40-page report to the Dutch government, explaining why they should carry out the investigation. The report stated it, "Considers that the measure at issue appears to constitute a reduction of charges that should normally be borne by the entities concerned in the course of their business".

The report dated June 11 was released on Friday and addressed to Frans Timmermans, the former Dutch foreign minister, who has now become the first vice president of the European Commission. European Union regulators have explained that as to why they think that the deal struck by Starbucks Corp. in the Netherlands can be considered as illegal state aid.

If the investigators find that Starbucks Corp. has received any unfair advantage then there are chances that the company could be asked to repay unpaid tax, and the amount to be paid can be increased. As per Reuters calculations, the amount was under 20 million euros.

Discussions are taking place with regard to what should be included in the calculation base and what should be the subject to Dutch corporate taxation. It is said that for a company like Starbucks, which has a global turnover of $14 billion, this matter would not matter at all.

Starbucks supporters think that the company does not have to run away from paying the tax. Also, nothing has been proven yet. There are chances that in the end everything will be sorted out. The result to come out, but Starbucks has said that the company pays all the taxes and they comply with all tax laws and international guidelines.

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