Starbucks has just posted its 2020 annual report, shrewd journalists have ground it up and filtered it into the most stereotypically Dutch news report that I have read in a long time. It turns out that all Starbucks in Europe import their coffee from the Netherlands. Although our meteorological climate is not conducive to the growth of coffee beans, our tax climate is far more attractive. Joking aside, it is not strange that Europe’s coffee needs are met through the port of Rotterdam. What is more controversial is that the Dutch Starbucks entity pays about 15 million euros annually to another entity in the form of royalties. As connoisseurs of the Dutch fiscal masterpiece will recognize, royalties are tax-free. And this apparently angered the European Commission. They labelled the tax situation as State Aid and ordered the Dutch government to tax Starbucks for an additional 26 million Euros.
But was this the end of the story? Did some vague threats from Brussels deter the champions of enterprise, the heirs of the VOC, the largest company in world history? Of course not: the Dutch government hired its best lawyers to fight the decision at the European Court of Justice. So instead of building more houses for its citizens or plugging some gaps in the defense budget, my government spend its tax money fighting an expensive case with the goal of losing even more money to a shell company. In this goal it succeeded. In the meantime the Dutch government kept track of how much Starbucks was losing out on. After taking into account interest the total payout was a cool 54 million.
What the Dutch media fails to grasp is how these shenanigans piss off our friends in Spain and elsewhere. The Dutch government erodes the corporate tax base for the whole EU but then chides Southern governments for not being able to balance their budgets. However, I would ask the Southerners not to take out their anger on the Dutch citizens. We are anything but a free market paradise, with the government spending an increasing 44% of the economy. The tax climate is sunny for multinational corporations but the rest of us are just as overworked and overtaxed as you.