October 21, 2015 / 10:12 AM / 4 years ago

UPDATE 1-Dutch say international standards applied in Starbucks tax deal

(Adds details, background)

AMSTERDAM, Oct 21 (Reuters) - The Dutch government said on Wednesday it was “surprised” by a European Commission decision on its tax deal with Starbucks and that it was convinced the arrangement was in line with international standards.

The EU regulator said Starbucks’ tax deal with the Dutch authorities constitutes illegal state aid and the Netherlands must recover between 20-30 million euros in back taxes from the coffee giant.

“The fact that the Commission observes that there would be state aid in the Starbucks file raises a lot of questions,” the Dutch said in a statement. “The Netherlands is convinced that actual international standards are applied.”

The Netherlands has come under pressure in recent years to reform its tax system, which enables many of the world’s largest companies to shift profits to tax havens.

Criticism that the Dutch were denying tax income to developing countries prompted a policy shift in 2013 and dozens of treaties have been under review.

The Commission said the system of so-called advanced tax rulings — confidential guarantees to companies that often lower taxation rates to single digits — violated the bloc’s rules on state aid. (Reporting by Anthony Deutsch; Editing by Catherine Evans)

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