Brussels fights tax deals with tech companies

The EU Commission has demanded that Luxembourg reclaim 250 million euros in tax benefits from Amazon. In addition it wants to bring Ireland before the ECJ over the country's refusal to collect 13 billion euros in taxes from Apple. Most of Europe's press greets the initiative and Irish commentators also argue that the countries of the EU should pursue a common policy in this area.

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Irish Examiner (IE) /

EU regulations also apply for Ireland

Dublin's decision not to comply with the EU ruling was a grave mistake, the Irish Examiner complains:

“The Department of Finance has described the process as complex but there is nothing particularly complex about escrow accounts, regardless of the amount put into them. ... That decision [of the EU Commission to take Ireland to the ECJ] may, indeed, be wrong but ignoring it is not the answer. The process of putting the money in escrow must begin immediately while, at the same time, preparations must be made to appeal the commission's original decision. The Department of Finance yesterday stated that 'Ireland fully respects the rule of law in the European Union.' We must now prove it.”

The Times (GB) /

Normal taxpayers will thank Brussels

The EU Commission is finally putting paid to the big companies' sophisticated tax avoidance schemes, the Times writes in praise:

“Where countries have different tax rules, multinational companies will move money around the world to take advantage of discrepancies. It is vital, therefore, that international organisations such as the European Union take a hard line on sweetheart deals that make this easier. ... Yet taxpayers from Glasgow to Gdansk have cause to thank Ms Vestager for her efforts. The tax bills of some of these companies are laughable. Last year Apple paid just £8 million of corporation tax in the UK on turnover of more than £1 billion.”

La Stampa (IT) /

Europe doing the work of the nation states again

This is not the first time EU institutions are taking action where nation states have failed, La Stampa comments:

“During the euro crisis the ECB provided the decisive stimulus that saved the single currency. This scenario is repeating itself in the desperate fight against tax avoidance in which billions of euros per year are at stake. But while the governments are simply paying lip service the EU Commission is taking action by imposing fines on companies that dodge taxes. ... This highest body is doing the work the politicians should be doing. This is consoling, but for Europe to function properly much more is needed. Above all courageous and coherent governments that unite to support sensible economic ethics.”

Der Standard (AT) /

Each country focussed on its own interests

The EU Commission's initiative against tax benefits for international companies isn't enough, Der Standard criticises:

“On the one hand it takes far too long before uncovered cases of illegal tax advantages are thoroughly investigated and lead to concrete consequences. Three years have already passed since 'Luxleaks', for instance. And Amazon began its 'tax saving' back in 2003. On the other hand the EU's lack of powers on tax affairs is unsatisfactory. The Commission can take action only indirectly via competition laws. Those who do have the power to make tax policy fairer across the EU - namely the governments of the member states - are dragging their feet. Everyone is thinking of their own interests.”

Süddeutsche Zeitung (DE) /

Tax sales, not profit

A pact among all EU states against unfair tax competition is needed, the Süddeutsche Zeitung stresses:

“The fairest approach would be to tax the sales rather than the profits of multinationals. That is precisely what a group of ten states including France, Germany and Italy are calling for. But the EU's tax enclaves are not interested in such a move. They prefer to protect their national business model and hide behind the argument that they, too, want an agreement among all the G20 states, and as long as there isn't one there must be competition. The other EU countries shouldn't be deterred by this brazen excuse. They must continue to push to regain control over the companies. Even if it's only in Europe for now.”

Les Echos (FR) /

Make companies pay for data

In view of the difficulties of taxing tech giants economist and entrepreneur Xavier Fontanet proposes a different solution in Les Echos:

“Each one of us would be offered a sum in exchange for his data and in turn pay for services rendered. ... This new form of contract which each country could make mandatory would make it possible to levy local taxes on all such transactions. And as a result more would also be done to increase data security. ... Obviously this would be a major change for the Gafa companies [Google, Apple, Facebook, Amazon] but they've survived others (!). If the gigantic barter trade on which this industry is based were rendered solvent in this way it would help to prevent conflicts over taxation and legitimate frustration.”