The EU announced that a tax deal between the Netherlands and Starbucks Corp. constituted illegal state aid.
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Luxembourg and the Netherlands lost a bit of luster as tax havens for some of the world's biggest companies this week, as the European Union fired its latest salvo aimed at multinational tax dodging.Yet the Netherlands is on pace to maintain its attractiveness as a tax-friendly address for multinationals, said several tax advisers to big companies. On Wednesday, the EU announced that a tax deal between the Netherlands and Starbucks Corp., and another between Luxembourg and Fiat Chrysler Automobiles NV, constituted illegal state aid. It said each company owed as much as 30 million euros ($34 million) in back taxes.Others, like Luxembourg, could eventually lose their abilities to attract revenues from companies that have addresses there but not much more.Last year, the country said it would eventually end something called the "Double Irish," which enabled companies like Google Inc. and LinkedIn Corp. to move billions of profits into offshore mailbox subsidiaries.For now, the EU is seeking relatively small bills from Fiat and Starbucks – tens of millions of dollars from companies reporting hundreds of millions, and sometimes billions of dollars, in annual profits.
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