Netherlands to appeal EU demand for Starbucks back taxes

The Dutch government said Friday it will appeal an EU ruling that Starbucks must pay some 30 million euros ($34 million) in back taxes for enjoying an "illegal" tax break.

In a major blow to sweetheart tax arrangements, Brussels said last month the deals the Netherlands had given to the US coffee giant and Luxembourg had awarded Italian automaker Fiat were illegal.

But Dutch Finance Minister Jeroen Dijsselbloem told MPs Friday the government disagreed with the European Commission's ruling as well as its demand to reclaim two years of unpaid taxes from Starbucks.

"The government is of the opinion that the Commission does not convincingly demonstrate that the tax authority deviated from the statutory provisions," he wrote in a letter to MPs Friday.

"It follows that there is no state aid involved."

In what could be a potentially awkward move, the appeal comes just as the Netherlands is due to take over the rotating six-month presidency of the EU on January 1.

Dijsselbloem insisted his country was supporting the EU fight against tax avoidance by multinational companies.

And he voiced concerns that the October 21 ruling would muddy the waters and lead to "uncertainty about how to enforce regulations."

"The Netherlands wants to make international agreements in order to counter tax avoidance by increasing transparency and aligning different national systems in a better way," he stressed.

The Dutch government was seeking "certainty" and therefore it "appeals the Commission decision in the Starbucks case," he added.

A spokesman for the finance ministry told AFP the appeal had not yet been lodged with the European Commission, but was expected to be filed in the next few weeks.

Dijsselbloem insisted the Commission's ruling "deviates from national law" as well as the recommendations of the Organisation for Economic Cooperation and Development (OECD).

"The Dutch practice is lawful and compliant with the international system of the OECD," he insisted.

Starbucks has also said it plans to appeal the EU decision.

Tax deals between EU member states and companies -- known as tax rulings -- are not in themselves illegal and the firms involved insist they fully comply with the tax laws where they operate.

But they have run afoul of the European Commission's tough rules on state aid, which are designed to ensure fair competition.

The EU argues that the rulings unfairly benefit bigger companies at the expense of smaller, often less influential rivals.

"Tax rulings that artificially reduce a company's tax burden are not in line with EU state aid rules -- they are illegal. All companies, big or small, multinational or not, should pay their fair share of tax," EU Competition Commissioner Margrethe Vestager said last month.