European Commission and Directorate-General for Competition 21 October 2015, Commission Decision (EU) 2017/502 of 21 October 2015 on State aid SA.38374 (2014/C ex 2014/NN) implemented by the Netherlands to Starbucks (notified under document C(2015) 7143) (Text with EEA relevance. )

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The European Commission held that an advance pricing agreement (APA) concluded by the Netherlands in favor of Starbucks Manufacturing EMEA BV (SMBV) constituted unlawful and incompatible State aid under Article 107(1) TFEU. The Commission determined that the APA's transfer pricing methodology, which utilized the transactional net margin method (TNMM) and a residual royalty payment to Alki LP, failed to comply with the arm's-length principle and resulted in an artificial reduction of the company's taxable base. Consequently, the Netherlands was ordered to recover the aid from SMBV and the Starbucks group to restore the competitive situation existing prior to the measure.AI