Fiat told to pay millions in EU tax probe

The financial unit of Fiat and the US coffee chain, Starbucks, have been told to each repay €20-€30 million in back taxes after the two companies were granted selective tax advantages in Luxembourg and the Netherlands, the European Commission said on Wednesday.

Fiat told to pay millions in EU tax probe
Fiat's financial unit in Luxembourg must pay back taxes of around €20-€30 million. Photo: Jorge Felix

The ruling follows an investigation which got underway in June last year as part of a series of probes against top companies announced in the wake of the LuxLeaks scandal, which revealed that some of the world’s biggest companies had negotiated lower tax rates in secret pacts with Luxembourg.

“Tax rulings that artificially reduce a company's tax burden are not in line with EU state aid rules,” Commissioner Margrethe Vestager, in charge of competition policy, said in a statement.

“They are illegal. I hope that, with today's decisions, this message will be heard by member state governments and companies alike. All companies, big or small, multinational or not, should pay their fair share of tax.”

The Commission has ordered Luxembourg and the Netherlands to collect €20-€30 million in unpaid taxes from Fiat Finance and Trade and Starbucks, respectively, in order to remove the unfair competitive advantage they have enjoyed and to restore equal treatment with other companies in similar situations.

It has been left up to the member states’ tax authorities to establish the exact amount.

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