Starbucks required to pay back state aid

The Dutch government has asked Starbucks to pay back 25.7 million euro, after the European Commission deemed it was illegal state aid.

Appeal is not suspensive

In the 2008 – 2014 timeframe, Starbucks struck a deal with the Dutch government, with lower taxes as a result. The European Commission judged that system was basically illegal state aid and demanded the Netherlands to reclaim those funds. The Netherlands have now decided to follow up on the European Commission’s ruling and reclaim 25.7 million euro. Future taxes will also be in line with the ruling as well. 

Only last month, it became clear that Starbucks still uses the old system to file its tax report. That resulted in only 434,000 euro in profit tax, while it slushes 33 million euros’ worth of royalties to its European main office in London.

The reclaim does not mean the entire case has been finalized: the Dutch government maintains no rules have been broken and has even appealed the case to the European Court of Justice. However, that appeal is not suspensive in nature, which means the Netherlands has to reclaim the money from Starbucks now.