Newsletter | Volume 1

Issue I
Issue II
Issue III
Issue IV
Issue V
Issue VI
Issue VII
Issue VIII
Issue IX
Issue X
Issue XI
Issue XII
Issue XIII
Issue XIV
Issue XV
Issue XVI
Issue XVII
Issue XIX
Issue XX
Issue XXI
Issue XXII

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Governments willing to offer sweetheart tax deals to reduce the tax burden is illegal?

G20 has pledged to crack down on multinational tax avoidance. The EU commission looks at multiple issues surrounding corporate taxation and order Starbucks, Fiat to repay 30 million euros in back taxes.

Ms. Vestager, the former Danish economy minister has taken a rather tough stand and sends a clear message to Starbucks and Fiat and continues with more ongoing investigations against other multinationals like Apple and Amazon are also looming.

The tax avoidance case that began in the wake of the LuxLeaks scandal.

The Netherlands and Luxembourg both disagree with the European Commission ruling that they would have to reclaim the tax from the two companies. Luxembourg rejected the decision and warned it would explore all legal options. Tax rulings, as the deals are known, are not in themselves illegal and the companies involved insist they fully comply with the tax laws where they operate.

Luxembourg further disagrees with the conclusions reached by the European Commission in the Fiat Finance and Trade case and reserves all its rights to bring the case to the European Court of Justice, the EU's highest court.

Starbucks in a statement said it stood by the Dutch government's reaction, adding that it would seek to appeal the decision.

Luxembourg and the Netherlands are hardly alone in 'abusing' the practice and the methodology ios considered by many as addressing the tip of the iceberg.

Ms. Vestager already taken on big corporations including Russia's Gazprom and is involved in a bitter anti-trust fight with Google, and declined the merger between Telenor and Telia in Denmark.

Further these decision on US companies follow hard on the heels of a decision by the EU's top court to reject a transatlantic personal data pact that risks punishing Silicon Valley companies operating in Europe.

The commissioner is seeking to establish that deals handed by EU governments to large companies to reduce their tax bills can constitute unlawful state aid.

This means that European governments have effectively been offering illegal subsidies, which must be clawed back, possibly in hundreds or thousands of cases.