Starbucks and Fiat are about to get massive tax bills. Here’s why

European ruling could have huge repercussions

Starbucks and Fiat are among companies that are facing tax bills worth millions in the EU after a tax avoidance case.

The EU’s competition commissioner looked into the tax arrangements of multinationals and is set to release a ruling this week which would mean big companies find it harder to avoid tax, and in fact will have money to pay back to governments.

The clampdown is on a practice whereby companies communicate with governments to find out which jurisdiction they can pay the least tax.

People close to the Starbucks case suggest the coffee chain will need to stump up €30m.

“We are entering a new era. State aid will have to be part of the considerations of any multinationals setting up a structure in Europe,” Caroline Ramsay at law firm Pinsent Masons told the FT.

According to one official, Fiat and Starbucks were only “the tip of the iceberg”, and the decision shines the spotlight on the likes of Amazon and Google, which have both been criticised in the past for their tax arrangements.

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