EU Tech Tax: Countries Plan To Tax Revenue Of Apple, Microsoft, Major Tech Firms – By AJ Dellinger (ibtimes.com) / March 5 2018
The European Union is expected to announce plans this month to tax the revenue of global technology companies as a way of counteracting corporate loopholes, according to a Reuters report.
The plan, which was announced Sunday by French Finance Minister Bruno Le Maire in Le Journal du Dimanche, would hit international tech giants with a revenue tax in the 2-to-6 percent range. Le Maire called the potential tax “a starting point.”
“A European directive will be disclosed in the coming weeks. It will be a considerable step. The [tax rate] range is 2 percent to 6 percent, we will be closer to 2 percent than 6 percent,” Le Maire said.
The tax would be based on where a customer buys a product rather than where the company operates, as tech firms have set up headquarters in countries with extremely low tax rates, such as Luxembourg, the Netherlands and Ireland.
Italy, Germany and Spain have joined France in seeking new tax proposals. Countries like Ireland have protested such proposals for fear of losing jobs.
Apple, in particular, has drawn headlines for exploiting tax loopholes. The tech giant moved much of its European operations to Ireland in attempts to take advantage of the country’s friendly 12.5 percent tax on corporations operating within its borders.
“The debate over Apple’s taxes is not about how much we owe but where we owe it. We’ve paid over $35 billion in corporate income taxes over the past three years, plus billions of dollars more in property tax, payroll tax, sales tax and VAT,” Apple told the Guardian in November.
In December, Apple agreed to pay Ireland $15.4 billion in back taxes under the orders of the E.U. in 2016.
Ireland was taken to court by the E.U. for not collecting Apple’s unpaid taxes in a timely fashion. The European Commission told CNBC in February that it would withdraw its complaint against Ireland on the condition that country recovers the full amount.
The European Commission in December also opened an investigation into whether Swedish furniture giant Ikea may have received unfair corporate tax breaks in the Netherlands.
In October, the European Commission order e-commerce giant Amazon to pay $293 million in back taxes due to an unfair tax deal in Luxembourg.
PB/TK – There are so many companies moving operations to Ireland, one would think the country’s population is falling off the Emerald Island. Too bad many of those moves are paper moves on the address label due to investment of an already existing company.
