European Union authorities have begun investigating a tax arrangement between Starbucks and the Netherlands that allowed the coffee giant to pay lower taxes than it should have, reports The New York Times.
A 40-page report describing the investigation was submitted to the Dutch government in June, but was released Friday, November 14, at which time the EU made its formal public accusation against the Netherlands.
The country is accused of “creating unfair advantages over other countries in the bloc” by allowing Starbucks to “shift revenues away from the Netherlands, where it had its European headquarters until recently.”
Specifically, regulators have focused on an Amsterdam roasting plant that used Starbucks’ intellectual property rights for its roasting process, for which “Dutch authorities attributed too little profit.”
“The report by the bloc’s competition commissioner — a preliminary finding in a review of Starbucks’ past arrangements with the Netherlands — is the latest sign of mounting concern, and indignation, over the scale of tax breaks for multinational companies in a period of weak growth and high unemployment in many parts of Europe,” writes The New York Times.
If the Netherlands is found by the European Commission to have colluded with Starbucks in an unfair tax deal, the government could be forced to “recoup large amounts of back taxes from Starbucks.”
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Karen Lo is an associate editor at The Daily Meal. Follow her on Twitter @appleplexy.