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The EU’s competition regulator, the European Commission, has closed tax probes into Amazon, Fiat, and Starbucks following court defeats.
In 2015 and 2017, the European Commission found that Luxembourg gave illegal tax advantages to Fiat and Amazon, while the Netherlands did the same for Starbucks, violating EU state aid rules. These tax rulings reduced their tax bills relative to other companies.
However, the EU courts annulled the Commission’s original decisions in all three cases, leaving the investigations unresolved.
Now, the Commission has closed the investigations, confirming that the companies didn’t receive unlawful tax advantages, in line with EU court rulings from 2019 to 2023.
🏳️The European Commission buries the hatchet in its long-standing probes into the tax treatment of Fiat, Amazon and Starbucks in 🇱🇺 and 🇳🇱. Following court defeats in these 3 cases, departing EU Competition chief @vestager acknowledges the tax rulings were not illegal state aid" pic.twitter.com/zHbzn2dOtY
— Simon Van Dorpe (@simonvandorpe) November 28, 2024
EU Regulators Close Long-Running Tax Investigations
Since 2013, the European Commission has investigated tax rulings under EU state aid regulations. Rulings that give companies an unfair advantage break EU competition rules.
The three cases date back nearly a decade. In 2015, the Commission found that Luxembourg and the Netherlands tax rulings gave Fiat and Starbucks unfair tax advantages totaling €20 million to €30 million each. However, the Court of Justice canceled the decisions after determining that the Commission had used incorrect parameters.
In the Amazon case, the Commission found in 2017 that Luxembourg gave Amazon €250 million in illegal tax breaks, but both the General Court and Court of Justice reversed the decision due to insufficient evidence.
Amazon, Fiat, and Starbucks are among the multinationals investigated by the Commission over tax deals, a key focus of departing Commissioner Margrethe Vestager. Although the closed investigations were struck down in court, the crackdown gained momentum after Apple was ordered to pay Ireland €13 billion in taxes.
Vestager, set to leave her post in the coming days, said EU judges in the recent Apple ruling upheld the Commission’s challenge of aggressive tax rulings and set a key benchmark for assessing tax planning.
