France and Germany seek to plug tax loopholes exploited by Apple, other tech firms
France is working with Germany on European Union reforms aimed at plugging loopholes U.S. technology companies like Apple use to minimize taxes, tactics that give foreign entities a leg up on local competition.
French Finance Minister Bruno LeMaire on Friday announced the plans last week, saying France will propose "simpler rules" for a "real taxation" on tech firms, reports Bloomberg.
"Europe must learn to defend its economic interest much more firmly -- China does it, the U.S. does it," Le Maire said. "You cannot take the benefit of doing business in France or in Europe without paying the taxes that other companies -- French or European companies -- are paying."
France and Germany already discussed tax issues and potential solutions at a joint cabinet meeting last month, the report said. German finance ministry spokesman Denis Kolberg on Monday said the two countries will investigate specific proposals after Germanys national election on Sept. 24.
French President Emmanuel Macron's government is spearheading the initiative, which looks to close loopholes in the European tax system that currently work in favor of foreign companies like Amazon, Apple, Facebook, Google and other foreign tech firms. Macron is calling on 19 European countries to follow suit as he seeks to keep campaign promises of reducing domestic corporate tax rates by 25 percent.
Tech companies, through complex financial maneuvering, are able to reduce or completely skip out on hefty corporate taxes by shifting revenue across borders to states with favorable rates. Apple, for example, employs a "Double Irish with a Dutch Sandwich" scheme that funnels overseas profits through the Netherlands, as well as other ports, and into Ireland, where the company is not considered a tax resident. The scheme allowed Apple to pay extremely low tax rates, at some points down to 0.005 percent.
A recent European Commission investigation into Apple's tax practices found rates on the company's European profits illegally low, a determination that resulted in a $15.2 billion bill. Ireland, which has stood by Apple throughout the EU process, was subsequently accused of granting illegal tax benefits to the company and is being forced to recoup the funds. Both Apple and Ireland are appealing the ruling.
French Finance Minister Bruno LeMaire on Friday announced the plans last week, saying France will propose "simpler rules" for a "real taxation" on tech firms, reports Bloomberg.
"Europe must learn to defend its economic interest much more firmly -- China does it, the U.S. does it," Le Maire said. "You cannot take the benefit of doing business in France or in Europe without paying the taxes that other companies -- French or European companies -- are paying."
France and Germany already discussed tax issues and potential solutions at a joint cabinet meeting last month, the report said. German finance ministry spokesman Denis Kolberg on Monday said the two countries will investigate specific proposals after Germanys national election on Sept. 24.
French President Emmanuel Macron's government is spearheading the initiative, which looks to close loopholes in the European tax system that currently work in favor of foreign companies like Amazon, Apple, Facebook, Google and other foreign tech firms. Macron is calling on 19 European countries to follow suit as he seeks to keep campaign promises of reducing domestic corporate tax rates by 25 percent.
Tech companies, through complex financial maneuvering, are able to reduce or completely skip out on hefty corporate taxes by shifting revenue across borders to states with favorable rates. Apple, for example, employs a "Double Irish with a Dutch Sandwich" scheme that funnels overseas profits through the Netherlands, as well as other ports, and into Ireland, where the company is not considered a tax resident. The scheme allowed Apple to pay extremely low tax rates, at some points down to 0.005 percent.
A recent European Commission investigation into Apple's tax practices found rates on the company's European profits illegally low, a determination that resulted in a $15.2 billion bill. Ireland, which has stood by Apple throughout the EU process, was subsequently accused of granting illegal tax benefits to the company and is being forced to recoup the funds. Both Apple and Ireland are appealing the ruling.
Comments
And who said anything about applying these laws retroactively? The EU case against Apple states that the Irish broke existing EU rules by offering Apple a special deal that they didn't offer to other companies. This is not a retroactive application because the law existed while Ireland was allegedly breaking it.
The problem I have the EU is judge and jury in these cases, which is ridiculous. (Have you ever seen them lose? Funny that).
It isn't 'wrong'. The EU is claiming that the Irish government gave 'what amounts to illegal state aid'. Of course that would imply that other member states were put at a disadvantage. This based on existing EU rules. There is no moving of the goalposts as some have suggested.
Who is actually right in all this will be decided at a future date but, as if today, these are the basic facts.
I agree with the rest of your post in general, and, as a staunch pro European, feel that we have progressed incredibly well as Europeans in general. There are always exceptions but for me, I'm positive overall.
My only gripe is with some of my fellow Brits for the Brexit tragedy.
If you believe the European Commission's actions are justified, i.e. that it demonstrated that Ireland gave Apple a selective advantage, then I'd ask: What is it that Ireland let Apple do that it would have prohibited a different, similarly situated, company from doing? Responsive to that inquiry I'd ask two pointed questions...
(1) During the period of time that the Commission's findings relate to, did Irish tax policy require that an arm's length principle be applied to profit allocation between Irish and non-Irish branches of non-resident Irish companies?
(2) If the answer to the first question is no, was such Irish tax policy in violation of any EU rules? In other words, did EU rules require Ireland (and presumably other member states) to have tax policies which required the application of an arm's length principle in such contexts?
But those who argue most vehemently are usually looking at only one side of the coin.
Okay, one last thing to say: Please drop this canard. It's literally the only "argument" any EU supporter has ever been able to use, and it's not even legtimate. Conflict is part of the human condition and always will be. There is absolutely nothing you can do to stop it, nor should you. You know what the response is to social engineering? The mass execution of the people who try to do it. We don't take kindly to that sort of thing. Liberalism is an idealistic ideology, grounded in French enlightenment thinking, in which some believe that, with the right amount of education and wise government effort, you can eliminate the impulse for violence and natural human vices, and make these faults the exceptions rather than the norm. It’s a lovely ideology. Very nice, idealistic, utopian. It promises peace, happiness, a certain equality and mutual understanding. How could people not fall in love with it? Unfortunately, it runs completely at odds with 13,000 years of human history. We are creatures of conflict by our very nature. We’ve been killing each other with rocks since the very beginning, and not even for good (meaning practical) reasons. We understand sin is bad; we fall into it regardless. There are too many temptations, too many inclinations. Limited resources, conflicting personal view sand opinions, disagreements over everything under the sun. In the end, it’s a naive and unrealistic way of thinking that seeks to wish away the harsh truths of the world, almost pretending that they don’t exist. Should we give up striving forward to do better? Absolutely not. We should always try to do better with our kind. But we shouldn’t lie to ourselves into thinking that all can be resolved with a bit of education here, some funding there, and a few rules over there. This is something that goes down to our very nature, to who we really are. Just giving some people some “rights” that we made up won’t solve everything just like that. The modern liberal (I’m talking about the average one; the properly educated ones tend to be a bit more mature) just can’t accept this. They want instant gratification, and will wage war against real and perceived obstructions to their vision of ideal society. The worst part is, it’s an endless cycle. There must always be more enemies for the liberals to combat. There must always be more wrongs to be corrected. If there isn’t, the whole thing falls apart.
Democracy is dictatorship. It's just "decentralized." It gives the appearance of multiple people dictating rule, when in reality it's just oligarchy.
Almost as though truth is objective or something.
the EC has turned into a kangaroo court at best and is embarrassing as Trump.