The European Commission ruled today that Starbucks and Fiat benefited from illegal tax deals with the Dutch and Luxembourg governments, in cases with major implications for the taxation of multinational companies.
Competition Commissioner Margrethe Vestager said all firms must pay a "fair share" and ordered the Netherlands to recover €20-30m in back taxes from the US coffee shop chain.
Luxembourg must recover a similar amount from Italian-US carmaker Fiat Chrysler Automobiles, she said.
Starbucks immediately said it would appeal, echoing the Dutch government in accusing the European Union executive of significant "errors" in its assessment.
Luxembourg, where much of the economy has been built on attracting multinational firms, said it disagreed and reserved its right to appeal.
Fiat denied receiving any aid from the Luxembourg state.
Ms Vestager, who has denied accusations of anti-American bias in launching other tax probes into Apple and Amazon and competition inquiries into Google, took care to avoid intruding on EU governments' jealously guarded rights to set their own tax rates.
The issue, she stressed, was firms being treated differently within the same national system.
"The decisions send a clear message," she told reporters in Brussels.
"National tax authorities cannot give any company, however large or powerful, an unfair competitive advantage compared to others. For most companies, especially the small and medium-sized, I hope this is a reassuring message."
The Commission said Starbucks benefited from a tax ruling - an assurance of future tax levels - from Dutch authorities in 2008 and Fiat from a ruling in Luxembourg in 2012.
It concluded that the taxable profits for Fiat's Luxembourg unit could have been 20 times higher under normal market conditions.
The precise amount of tax to be recovered must now be determined by Luxembourg and the Netherlands on the basis of the Commission's methodology.
Apple and Amazon cases very different - Commissioner
Warning that "we do not stop here", Ms Vestager described the cases of Apple in Ireland and Amazon in Luxembourg, where the Commission also suspects the companies of benefiting from illegal state subsidies via the tax system, as "very different".
She declined to say when she would rule on them.
The Minister for Jobs, Enterprise and Innovation said he does not believe the Government has much to be concerned about in relation to the tax arrangements it has with US multinational Apple.
Richard Bruton said the Government has fully complied with the European Commission investigation into its dealings with Apple.
"We have made big changes with our corporate tax code over the last two years and we believe we have a very open and robust code that is clear for all to see," the Minister stated.
IDA Ireland's chief executive also said he does not think that the Commission's findings in the Fiat and Starbucks tax cases bodes badly for Ireland regarding the Commission's investigation into Apple.
Martin Shanahan said there has been no finding yet in the Apple case nor is there a timeline around when the decision will be announced.
He said Ireland has a transparent open taxation system and that he does not think the country has anything to be concerned about in relation to tax.
He added that Ireland has been fully engaged with the OECD process around BEPS, has made changes to the taxation regime over the past couple of years and introduced country by country reporting.
Multinational companies are here for other reasons than tax, he claimed.
Meanwhile, inquiries are also continuing into the Belgian government's treatment of dozens of unidentified companies.
"More cases may come if we have indications that EU state aid rules are not being complied with," the Commissioner warned.
She also noted that there was a broader EU and global attempt, coordinated by the OECD, to crack down on tax avoidance using artificial cash flows through ultra-low tax regimes.
"We cannot achieve fair tax competition in Europe with enforcement of EU state aid rules alone. We cannot do it alone," Ms Vestager said.
"The fight against tax evasion and tax avoidance can only be won with a combination with enforcement of state aid rules and legislative responses."
Special deals that slash multinationals' tax bills to little more than zero in some cases have come under closer scrutiny as governments struggle with declining revenues.
Ms Vestager said that Fiat's Luxembourg unit paid "not even" €0.4m in corporate tax last year and Starbucks' Dutch subsidiary less than €0.6m.
Starbucks said it paid an average global effective tax rate of about 33%.
"Starbucks shares the concerns expressed by the Netherlands government that there are significant errors in the decision, and we plan to appeal since we followed the Dutch and OECD rules available to anyone," a spokesman said.
Commission President Jean-Claude Juncker has rejected calls for him to resign because the Luxembourg tax system was developed during nearly the quarter-century he served as his country's finance minister and prime minister.
Since taking up the EU post a year ago, he has said the Commission will work to level the international playing field in corporate taxation.
