The decision gives details of the Commission's investigation into the Netherlands' tax and transfer pricing rules, and its reasons for deciding that the country's advance pricing agreement (APA) with Starbucks constituted illegal state aid.
The European Commission has been investigating whether rulings by member countries on topics such as transfer pricing are in accordance with state aid rules.
In October 2015 it decided that rulings provided to Fiat by Luxembourg and Starbucks by the Netherland constituted unlawful state aid and that the countries would have to recover €20 to €30 million from each company to claw back the benefits of the state aid received.
The Commission said a tax ruling issued by the Dutch authorities in 2008 gave a selective advantage to Starbucks Manufacturing, a Netherlands company, which had the effect of reducing its tax liability.
The APA was calculated based on a "very substantial" royalty paid by Starbucks Manufacturing to a UK-based entity in the Starbucks group for coffee-roasting intellectual property. However, Starbucks Manufacturing did not directly benefit from the intellectual property and the calculation was therefore wrong, the decision said. By accepting this incorrect calculation, the Netherlands gave Starbucks a selective advantage, the Commission said.
Starbucks also paid an "inflated price" for coffee beans to a Swiss group company, reducing its tax base, the decision said.
The precise amount to be recovered from Starbucks is to be determined by the Dutch tax authority on the basis of a methodology laid out in the Commission decision. However, the Netherlands appealed against the decision in December 2015.
Tax expert Heather Self of Pinsent Masons, the law firm behind Out-Law.com, said: "“The publication of the Commission’s decision is just the next stage in the process, and it will be some time before this case comes to court. In the meantime, the Apple decision is expected imminently, and is likely to be for far more significant figures."
The Commission has been investigating Apple since 2014, when it said that APAs agreed between the Irish tax authorities and Apple may have given the company unfair advantages incompatible with EU state aid laws.