Amazon and Apple hit by EU tax crackdown

It isn't a punishment, stop calling it like a punishment. There is no additional fine. The only thing which has to be paid is the due tax plus interest.

It is you who has to read. From the article:

"Meanwhile, the Commission said it planned to refer Ireland to the European Court of Justice for failing to recover €13bn in back taxes from tech giant Apple."

> What keeps Ireland and Luxembourg from doing this again? If the EU is going to strike down state-mandated tax deals, why not just require the tax deals to have approval from them in the first place?

Hopefully Ireland or Luxembourg won't let themselves be allowed to avoid taxes anymore. But since neither Apple, nor Amazon, nor Ireland, nor Luxembourg is being fined (again, there is no punishment) I'd speculate that it might still be lucrative. After all, being able to invest > interest.

> It's seen as punishment by many because when a country tells you what you are required to pay their country, a rational person reads that and sees someone reasonably following the rule.

Quit playing innocent. We all know exactly that they're trying to avoid taxation. The constructions are well known by now, no need for a facade. It can be easily proven as well, because we can see that e.g. Apple is selling an X amount of iPhones in for example Germany, yet the amount of income tax doesn't resemble that. Not in Germany, nor in Ireland.

> To use your analogy (flawed, but we'll stick with it), imagine if there were only a dozen or so cities and the mayors kept giving these tax deals on their own city's taxes. Why would the IRS just allow this to keep happening and then only selectively go after certain offenders?

Right, so when a burglar gets caught, his defense would be: "but your honor, these other burglars are still freely running around." That's a fallacy, obviously, called tu quoque ("me too").

There's also a plausible reason why they're not going after the other companies: 1) They actually are going after other companies as well. Here's a list [1] 2) the list is big and it takes a lot of research, time, and therefore money to investigate. So they go after the big fish first 3) European companies don't follow this construction. Yes, they do follow another one, and I hope they'll get the appropriate amount of tax due from those as well. The fact those companies might be avoiding tax for now doesn't justify that other's get away with it. That'd be, as explained, tu quoque.

[1] https://en.wikipedia.org/wiki/Double_Irish_arrangement#Compa...

You might want to re-read gps comment again, because you seem to be mangling their analogy:

>Imagine a mayor in a US city giving a company a deal whereby they don't pay state and federal taxes and only pay a low municipal tax.

Gp's point is that cities don't get to override federal taxes - if they attempt it and you're dumb enough to listen to them, the IRS will definitely collect what they owe. The same goes for individual countries in the EU - they don't get to override EU law.

> The IRS isn't going to come and tell me to pay my city more in property taxes because I got an unfair abatement.

Your critique falls apart because there is no US federal law that says cities can't unfairly advantage companies inside their borders. In contrast - there are EU laws make this form of state subsidies illegal.

I personally don’t see the point of corporate tax, other than to make other taxes seem smaller than they’d otherwise have to be. Profits are not in and of themselves useful to people; they have to be converted to income somehow.

- I'm sure Amazon did its best to pay the lowest possible tax. In EU they are taxed on profit so if they woundn't make a profit(i.e. they would reinvest) they would not be taxed.

- Amazon Europe is not Amazon US. They don't want to trade as Amazon US in Europe because they would pay even more tax(in the US).

- It's not enough that they are registered in a country with the lowest possible tax, they get a special deal there too to pay less tax than the other Luxembourg based companies/business. This is what EU is sueing them for...they've got state aid(as tax break) from Luxembourg.

That does not quite add up .... let's say the tax rate is 20%. The tax on $0.2B is $40m, the tax on $2.2B would be $440m, which would mean the company is making a $220m loss. But not only that, say the salaries are $1B then the government would $200m in double taxation, maybe socialise the loss and take $200 million from the workers salaries.

Then not only that, lets say the $1B of junk is made in the same country as the above company, the government would make another $200m by taxing them. That is a little regressive.

So you would penalize companies that are offering a useful service and making less profits over those that are offering a useful service and making more profits. The former may be reducing cost greatly to the consumer but may not be able to stay in business due to this type of tax. Thus, it would artificially prop up the cost of goods to the consumer.

The "rich" country then doesn't get the corporation tax, which would help balance the losses incurred by large companies forcing wages down; instead that money goes to the lowest bidding country elsewhere that's not incurring costs from the company's operations.

Allowing this exploit makes the corporation's (and thus their owners/executives) richer at the expense of the workers and ordinary tax payers.

It's right for the EU to act in favour of its citizens in this regard.

Indeed you're right the money drains to the country offering the best deal, which isn't necessarily the poorest as they can't afford to give rich corporations such deals. There's probably a measure of legal framework too - how easy is it too bypass legal requirements by supporting the political party in power, that sort of thing.

It’s being reduced to 27 from 29, your figures don’t count in CIT.

I generally disagree with the creation of special tax deals between governments and individual businesses, but it is the government that I disagree with, not the businesses for optimizing their tax burden.

As for the second parts it’s every large non-EU corporation and that is the problem.

These acts as well as the anti trust investigation into Google and other such affairs is a protective response to the lack of competitiveness from EU corporations primarily in Tech.

Tax avoidance in the EU isn’t an oversight it’s a deliberately orchestrated and legislated ordeal which was established to favor EU corporations.

Since the EU seemed to nearly skip the tech giant bubble and it’s largest corporations are primarily ancient energy and finance giants it now goes after US corporations which have subsidiaries in the EU.

This is selective enforcement the EU didn’t go after Lidl which keeps much of its Tax books private it didn’t go after BNP, Shell, ING and the like all of which also excel at not paying.

This isn't collective bargaining it's selective application of the law to give EU companies an advantage.

[1] https://www.treasury.gov/resource-center/tax-policy/treaties...

There's no need for the plunder rhetoric. They omitted to pay tax to EU states, and now they'll have to pay. You have to pay income tax as company here in the EU, including big multinationals. Actually, especially multinationals because those are selling the most. So our EU governments are also missing out the most on them.

The whole problem can be solved btw, if there's political willpower. It is fairy easy. If you have a McDs franchise in San Francisco, then you are selling your McNuggets in San Francisco at that franchise. There's a fellow swiping his card in San Francisco and receiving his goods in San Francisco. A clear case of selling your goods in San Francisco. This means that your transaction was in San Francisco, so you pay income tax there as well, ie. to California. There you go, done.

No more companies incorporated in silly states or countries like Delaware or Liechtenstein or Ireland or Cayman Islands.

It isn't happening because "everyone is doing it" but that is a bad excuse, a fallacy actually: Tu quoque [1]

[1] https://infidels.org/library/modern/mathew/logic.html#tuquoq...

If you selectively only pick the cases against US companies because that's what you hear about in the US media, but ignore the cases against EU companies, then I can see how you can get that impression. But it's not really the full picture.

More importantly, and regardless of what you think of the merits, the EU is not the beneficiary, since those tax breaks are to be paid to the respective member state. The benefit for the EU – one way or another – is a more competitive environment, not the money it does not even get. So, "plundered" is an inaccurate term either way.

And you hear a lot about big US companies, because (1) smaller US companies are less likely to operate in the EU and (2) US antitrust law has been watered down since the late 1970s (starting with Bork's "Antitrust Paradox"), leading to a concentration of corporate power that's simply not present in Europe [1]. As a result, antitrust cases against EU companies tend to be more about collusion, while antitrust cases against US companies in the EU tend to be more about abuse of a dominant market position.

[1] See, for example, OECD self-employment rates and how America is near the bottom: https://data.oecd.org/emp/self-employment-rate.htm

These companies have the same names as USA corporations but they're not the same corps legally,are they, otherwise they'd be based in Delaware or wherever they falsely claim to be based in USA?

You could make a good case that the European Commission choose to do this as part of an approach to reform the taxation of multinational entities within the EU. But they didn't single out Apple and Amazon specifically.

Irelands economic policy is "no taxes, make your EU HQ here!", so you just argued for the exact opposite position a few minutes before. Which one is it?

How long does the "poor, old me" thing apply?