After the Apple controversy, the European tax wars are on to the next stage. Austria is concerned over the level of taxes from Starbucks and Amazon. Apparently, the coffee-shop and the on-line retail organization which is hugely popular all over the world, pay fewer taxes than a sausage stand – according to Chancellor Christian Kern, head of the Social Democrats in Austria.
Chancellor Kern says every café in Wien and every sausage stand pays more towards the budget than a multinational company. Kern quoted two powerful symbols of Austria’s food culture.
He mentioned Amazon, Starbucks, and other giants, in a praise for the European Commission ruling for Apple. The European Commission decided earlier this week that Apple is going to have to pay 13 billion euros (that’s 14.5 billion dollars) in taxes to Ireland. That’s because the company made huge profits over there and claimed state aid.
Apple officials want to appeal the ruling. Executive Tim Cook referred to the decision as “total political crap” and warned governments that they can either have jobs or taxes.
Google, Facebook, and other big companies claim they follow all tax rules. Kern criticized other EU states which have low taxes in place. These lower tax regimes have brought in many big companies to do business there, but Brussels disagrees.
Kern believes that what Malta, Luxembourg or the Netherlands are doing shows a lack of solidarity with the rest of the European economy.
Kern referred to the Austrian situation, where companies take all advertising profits out of the economy but do not pay corporation tax or advertising tax in Austria.
Kern pointed out that Amazon paid 1,400 euros (that’s 1,562 dollars) in corporate tax, in 2014. The current legislation in Austria uses these taxes to fund the independent media in the country.
But these fees don’t apply to online ads which bring huge profits for corporations.
Austria is not a European exception in collecting taxes to support national broadcaster. The United Kingdom does the same thing with the British Broadcasting Corporation (BBC).
Defenders of directing taxes towards media outlets say that this helps the national media to keep independent from commercial interests.
What’s your opinion on this article? Do you believe multinational companies pay too little tax and are perhaps too greedy? Let us know, below. Thanks!
Image Source – Wikipedia