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Amazon, Google and Co .: The EU wants to take stronger action against the tax tricks of corporations

2021-05-20T15:07:54.709Z


The EU wants to make it harder for Amazon, Google, Facebook and others to avoid tax payments in Europe. Are the member countries pulling along?


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EU Competition Commissioner Margrethe Vestager: A whole bunch of new rules

Photo: YVES HERMAN / POOL / EPA

It was a serious setback that EU Competition Commissioner Margrethe Vestager suffered last Wednesday.

She wanted to demand an additional tax payment of 250 million euros from the US Internet giant Amazon - wrongly, as the court of the European Union in Luxembourg certified.

Once again, powerful multinationals, who hardly pay taxes in Europe, turned the finger on the EU authorities.

Now Brussels wants to try another way.

On Tuesday, Vestager's colleague Paolo Gentiloni announced a whole bunch of new EU rules with which Brussels not only wants to increase the pressure on defaulting corporations.

But also to EU low-tax countries such as Ireland, Luxembourg or the Netherlands, which attract company headquarters to the country with favorable conditions.

Up to 70 billion euros more in tax revenue?

If Gentiloni has his way, it should soon become more difficult. The former Italian Prime Minister wants to make public in which countries the companies pay how much or how little taxes. He plans to regulate letterbox companies more tightly and to remove the national loopholes and exemptions from corporate tax. Gentiloni hopes that the international community could earn up to 70 billion euros as a result. And thus ensure that the tax burden "is distributed more fairly between companies and states".

The EU Commissioner also wants to step up the fight against VAT fraud, introduce a Europe-wide digital tax and standardize the levies on debt and equity. When a company takes out a loan, it can deduct interest costs from tax. If the owner injects money himself, the tax authorities access the total amount. The Brussels authority wants to reduce this incentive to base corporate finances too much on debt.

The green European politician Sven Giegold praises the plans are "quite ambitious". The only question is, how does the Commission intend to enforce them? If the authority wants to achieve anything in tax matters, the member states have to agree. All of them. In the EU, however, there are at least five countries that have turned the low tax principle into a business model. In addition, there are states such as Hungary, which in principle do not want to grant the Brussels headquarters any additional powers.

It is true that the EU could use an exception rule according to which the Commission can enforce proposals with a majority in the event of severe distortions of competition.

But Gentiloni did not make use of this - much to Giegold's annoyance.

"Because of the blockade of most tax haven countries, progress is now as good as impossible," complains the green financial expert.

Brussels hopes for a different union of states

His CSU colleague Markus Ferber also thinks it is unlikely that the latest EU push will end the trickery of the corporations and their willing helpers in the finance ministries. "A uniform framework for corporate taxation would be a real added value for the internal market," says the EU parliamentarian. But the commission had already "got a bloody nose several times" with similar proposals. For years, for example, common benchmarks for corporate taxation have been negotiated in Brussels. But so far all proposals have failed due to resistance from individual EU members.

Instead, Europe's financial politicians must now hope for an even larger community of states, for the industrial countries organization OECD.

There has long been talk of joint measures against tax evasion by the multinationals.

And since the new US President Joe Biden presented proposals for a global minimum tax, the negotiations have been seen as promising.

The Federal Ministry of Finance, for example, is hoping that an agreement could be in place by July.

Experts estimate that if it comes to that, the tax offices around the world could generate an income plus in the high two-part billions.

Amazon, Google and Co. would then have to pay more taxes, not only in Ireland or the USA.

But also in many other countries where they do business.

And so the most promising proposal of the new EU tax plan can be found under the item "International": If there is a tax agreement within the framework of the OECD, it is said that the EU will immediately "put into effect in all member states" .

Source: spiegel

All business articles on 2021-05-20

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