Europe goes af­ter tax-sav­ing gi­ants

Google, Ama­zon, oth­ers legally pay lit­tle or no cor­po­rate taxes; EU billing them.

Austin American-Statesman - - BUSI­NESS - AL­BERTO MARTÍNEZ / AMER­I­CAN-STATES­MAN

PARIS — A storm is brew­ing in Europe as na­tions try to force In­ter­net pow­er­houses like Google and Ama­zon to pay more in taxes.

Hun­gry for money to prop up their strug­gling economies, gov­ern­ments are ac­cus­ing the tech­nol­ogy gi­ants of in­cor­po­rat­ing them­selves in low-tax coun­tries so they can avoid pay­ing hun­dreds of mil­lions of dol­lars to coun­tries such as Ger­many, Bri­tain and France — where most of their Euro­pean in­come is de­rived.

In Bri­tain on Mon­day, a law­maker push­ing to tighten laws said the multi­na­tion­als’ abil­ity to es­cape cor­po­rate taxes “is out­ra­geous and an in­sult to Bri­tish busi­nesses and in­di­vid­u­als who pay their fair share.”

Ac­cord­ing to court doc­u­ments, French au­thor­i­ties raided Google’s of­fices in Paris over the sum­mer and seized doc­u­ments in a tax dis­pute. More re­cently, ac­cord­ing to a pub­lished re­port, the French govern­ment pre­sented Google with a $2.18 bil­lion tax bill; Ama­zon ac­knowl­edged one for $252 mil­lion. Face­book is also in the line of fire.

In Italy, the un­der­sec­re­tary of the Econ­omy Min­istry re­vealed dur­ing ques­tion­ing in par­lia­ment that the tax police in­spected Google’s books, adding that it found mil­lions in un­de­clared in­come and un­paid sales tax.

The politi­cians are crack­ing down on U.S.-based multi­na­tional com­pa­nies such as Google, Ap­ple, Face­book and Ama­zon, claim­ing they pay lit­tle or no tax in Europe in spite of gen­er­at­ing bil­lions in rev­enue there.

But there is noth­ing il­le­gal to the multi­na­tion­als’ ac­tions. Due to the way the Euro­pean Union is run, com­pa­nies op­er­at­ing in Europe can base them­selves in any of the 27 mem­ber coun­tries, al­low­ing them to take ad­van­tage of a par­tic­u­lar coun­try’s low tax rates.

By set­ting up over­seas head­quar­ters in low-tax ju­ris­dic­tions such as Ireland or Lux­em­bourg and shift­ing the

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