Apple & other tech giants may face EU universal minimum tax rate in the future
Apple and other major companies should be subjected to a minimum rate of corporation tax in all countries, Germany's finance minister has proposed, in order to prevent technology giants and other multinational organizations from evading taxes, despite the multinationals presently obeying all the laws presently in place.
Finance minister Olaf Scholz insists there needs to be a "worldwide minimum tax level that no state may go below," in relation to corporation tax. The lofty goal, which would require an agreement by practically all countries if it were ever put into practice, would ensure companies would pay governments a considerable amount of tax, regardless of any financial trickery the firms perform to minimize their tax outlay.
Failing to comply with the proposal would be met by tougher measures than are currently available for regulators.
Writing in a guest article for Welt am Sonntag and spotted by Reuters the minister advised the measure was considered alongside similar ideas being discussed by France over the matter, to encourage firms like Apple, Amazon, and Google to pay a fair amount of domestic taxes in each market they operate within, instead of siphoning off revenue through another country with a far lower rate of tax.
Scholz advises the rules would also need to make it harder for firms to shift funds to tax havens, where it could accumulate and avoid most taxes. According to Scholz, the Internet economy is "exacerbating the problem" caused by globalization, and making it easier to place "profits in low-tax locations."
Though seemingly impractical to set up at a global scale, the proposal is part of continued efforts by the European Union to try and get companies like Apple to pay more tax. Europe has tried to harmonize the tax rates across the entire union, but countries like Ireland who offer very low tax rates are resisting such efforts.
Scholz's comments follow after September's denial of a report the ministry had given up on plans to raise taxes on tech firms, allegedly because "demonization" of such firms was "not productive." While the report was based on internal documents, a spokesperson claimed they were "very selectively" cited as one of many options, and assured the finance minister had yet to make a decision on one or more tax instruments.
In March, the European Commission revealed plans that would require large firms to pay taxes all over the E.U., rather than just in the country of their regional headquarters.
Apple is considered to be a major target of the proposals, in part due to its high revenue in Europe that it funnels through its headquarters in Ireland.
A 2016 ruling by the European Commission declared Ireland had to collect billions in back taxes from Apple, after being found to have extended preferential tax treatment to the company. Apple has since paid the entire 13.1 billion euro ($15.3 billion) balance, as well as 1.2 billion euro in interest, into an escrow account controlled by the Irish government.
Both Apple and Ireland are appealing the ruling this fall.
Finance minister Olaf Scholz insists there needs to be a "worldwide minimum tax level that no state may go below," in relation to corporation tax. The lofty goal, which would require an agreement by practically all countries if it were ever put into practice, would ensure companies would pay governments a considerable amount of tax, regardless of any financial trickery the firms perform to minimize their tax outlay.
Failing to comply with the proposal would be met by tougher measures than are currently available for regulators.
Writing in a guest article for Welt am Sonntag and spotted by Reuters the minister advised the measure was considered alongside similar ideas being discussed by France over the matter, to encourage firms like Apple, Amazon, and Google to pay a fair amount of domestic taxes in each market they operate within, instead of siphoning off revenue through another country with a far lower rate of tax.
Scholz advises the rules would also need to make it harder for firms to shift funds to tax havens, where it could accumulate and avoid most taxes. According to Scholz, the Internet economy is "exacerbating the problem" caused by globalization, and making it easier to place "profits in low-tax locations."
Though seemingly impractical to set up at a global scale, the proposal is part of continued efforts by the European Union to try and get companies like Apple to pay more tax. Europe has tried to harmonize the tax rates across the entire union, but countries like Ireland who offer very low tax rates are resisting such efforts.
Scholz's comments follow after September's denial of a report the ministry had given up on plans to raise taxes on tech firms, allegedly because "demonization" of such firms was "not productive." While the report was based on internal documents, a spokesperson claimed they were "very selectively" cited as one of many options, and assured the finance minister had yet to make a decision on one or more tax instruments.
In March, the European Commission revealed plans that would require large firms to pay taxes all over the E.U., rather than just in the country of their regional headquarters.
Apple is considered to be a major target of the proposals, in part due to its high revenue in Europe that it funnels through its headquarters in Ireland.
A 2016 ruling by the European Commission declared Ireland had to collect billions in back taxes from Apple, after being found to have extended preferential tax treatment to the company. Apple has since paid the entire 13.1 billion euro ($15.3 billion) balance, as well as 1.2 billion euro in interest, into an escrow account controlled by the Irish government.
Both Apple and Ireland are appealing the ruling this fall.
Comments
"But I put that in there for my friends! I didn't want these other people taking advantage of it!"
The issue isn’t tax evasion it’s we (local governments) want more money...
The tax system doesn’t make a lot of sense. Was there some kind of “value added” in those countries? Was there Apple employees that needed social benefit taxes (I.e. unemployment tax) etc.
I assume physical locations (property- Apple Stores) are already being taxed. The taxes pay for things like road maintenance, etc.
What are these additional taxes for? Besides saying “we want more”?
This is how Amazon got nailed and now have to collect sales tax for states like PA, PA found out even though Amazion did not have any building in PA, they actuall had people on their payroll working at the warehouses which handle all their order fulfillment.
However if Trump gets his way all the duties and tariffs will go away and the EU can not put a tax on US companies selling their products in the EU so Apple could shut down its operations in Ireland and just let people order online and ship products from China. So all transaction are then done outside the EU. If that happen then the EU can not tax Apple profits if they do not have physical presents in the EU, or just tax an Apple Store front and what it makes.
The only reason government are now going after companies like this is due to the fact Companies for the first time in 20 or so years are making serious profits, prior to this they were just making a profits and not everyone was working. Governments not think it is safe to go after companies' bank accounts.
This is just another example of you think you have problem now, wait to you see the solution the government comes up with.
The fact that they're looking into corporate taxes is kind of an indicator that this might be about government tackling an issue that the population indeed gives a mighty fuck about, eh.
Also, it's starting to hit home that in the digital age, there are a number of corporations turning over more profit than the GDP of most countries, and the countries where that profit is actually generated see no tax from it, despite there not being any tangible benefits for them. In the physical age, giving massive tax breaks to encourage corporations to settle there would generate jobs, reducing employment and increasing spending and income taxes, which in turn would benefit the whole economy.
...while at the same time the EU is considering a minimum corporate tax rate.
What's wrong with this picture?
Still, a minimum corporate tax rate sounds like just the thing we need here in the US. Especially since our "lack of income" is "demanding" that we cut SSI, Medicare, Medicare, and all of the other programs upon which the elderly, retirees, and the poor depend.
Good luck getting that past the House, Senate, and WH, however...
The government could take 100% of everyone's money and figure out all kinds of ways to waste all that money and it still wouldn't be enough. As for the EU, their Socialist Economy can't stand up on it's own and so they keep figuring out ways to steal billions of dollars from American company's that really did no wrong. Followed the laws. They make up new crap to stick a big fine on a company.
See the problem with Socialism is at some point you run out of other people's money!!!
What's wrong with this picture?
What's wrong with this picture? Nothing, that I can see.