Starbucks and Starbucks Manufacturing EMEA v Commission

In Starbucks and Starbucks Manufacturing EMEA v Commission (Case T-636/16) (24 September 2019) the General Court of the European Union found that the commission had not established that a transfer pricing arrangement constituted state aid.

In 2008 the Netherlands tax authorities concluded an advance pricing arrangement (APA) with Starbucks Manufacturing EMEA BV (SMBV) part of the Starbucks group which inter alia roasts coffees. The objective of that arrangement was to determine SMBV’s remuneration for its production and distribution activities within the group. Thereafter SMBV’s remuneration served to determine annually its taxable profit on the basis of the Netherlands corporate income tax.

In addition the APA endorsed the amount of the royalty paid by SMBV to Alki another entity of the same group for the use of Starbucks’ roasting intellectual property. The APA provided that the amount of the royalty to be...