7 ms·

Europe fires warning shot against U.S. tech companies with new tax ruling

40 points by ghosh 11y ago

stefanix 11y ago
So dumb to make this about US vs EU when this is about closing tax loopholes for multinationals.
- ptha 11y ago
  The majority of the tax to be recovered are actually related to European and not US companies: "While declining to name the companies who benefitted from the tax scheme, Commissioner Vestager said that €500 million of the total tax bill of €700 million related to European companies, a development that may appease critics of the European Commission who have accused Brussels of unfairly targeting US multinationals." http://www.irishtimes.com/business/vestager-denies-delay-in-probing-ireland-s-apple-tax-deal-1.2492451 http://www.irishtimes.com/business/vestager-denies-delay-in-...
- lugus35 11y ago
  Actually, it's Belgium vs UE commission. And investors end up the laughing stock.
- mcv 11y ago
  Yeah, it's not EU vs US, it's EU closing a Belgian tax loophole for non-EU multinationals that the US had already criticized. EU and US seem to be on the same side here. Except for Belgium.
Oletros 11y ago
The title is totally click bait
- to3m 11y ago
  The picture is awesome too.
golergka 11y ago
So, (1) companies adhered to Belgium laws, (2) Belgium laws were found to be violating international agreements and (3) _companies_ are supposed to pay for it? What the fuck? Why doesn't Belgium pay for its violation itself? Why someone who was adhering to the law would need to pay because the law was found to be wrong? I must have misunderstood this somehow, because this is just too idiotic otherwise.
- frigg 11y ago
  >I must have misunderstood this somehow, because this is just too idiotic otherwise. You did misunderstood. Belgium incorrectly offered tax aid to companies and now it's required to rectify it, hence said companies must pay what is legally required.
  - golergka 11y ago
    > Belgium incorrectly offered tax aid to companies and now it's required to rectify it, OK, that's reasonable. > hence said companies must pay what is legally required. And here I get a huge WTF. If someone gave me money that he couldn't give me (for example, he stole it), I'm not required to give it back — he is. Why isn't Belgium held responsible for it's actions?
    - FeepingCreature 11y ago
      > If someone gave me money that he couldn't give me (for example, he stole it) What's happening here is that the person never had the legal right to give you that money. So you're in factual possession of money that you don't - can't - legally own.
    - tremon 11y ago
      I think it's a matter of framing the issue. Tax deals and rebates are already subject to reinterpretation. Even personal income tax can be re-evaluated later (up to seven years in NL, I believe). This is not a fine, it is a tax correction. These happen all the time, especially with complex tax structures that multinational businesses use.
igl 11y ago
Meh. What about Holland and Luxemburg?
- mpweiher 11y ago
  One step at a time.
- tremon 11y ago
  what about them?
  - mattmanser 11y ago
    He's referring to the double-Irish arrangement, a similarly dodgy tax scheme used by multinationals: https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement
- lugus35 11y ago
  "Luxembourg under Junker premiership had turned into a major European centre of corporate tax avoidance." https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controversies https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controvers...
userulluipeste 11y ago
So let's suppose I am a company that saw a green field to extend to - a country which gets out of its way to entice me to come and develop there. Now I am in their yard, keeping my part of the bargain, the moment in which they draw out their claws and looking hungry at me say "you know what, forget what we've told you, it wasn't good anyway, so let's make a new deal".
- snarfy 11y ago
  I think it's fitting. When they move their business out of country to avoid taxes they can't expect the same legal protections. I'm going to laugh when these businesses move to China and the government seizes them for national interests. By avoiding taxes they are starving the dog that protects them.
  - userulluipeste 11y ago
    A company extends itself into different countries for a lot of different reasons, not only for avoiding taxes. Besides the mentioned tax cuts, the move into Belgium could have been also because they needed a foothold somewhere in European Union anyway, and also it could have been for some level of expertise that was harder to achieve otherwise, and possibly a lot more. It's about the whole package. China has a policy of allowing external players into its playground only in partnership with a local company over which the government has absolute power and control. That is a bitter pill to swallow, but some choose to take it any way! China can arbitrarily change its rules (which are bad enough as they are) at any time (usually into something worse), I'll give you that. But it doesn't make it feel better with going through the current Belgian/EU debacle!
- Oletros 11y ago
  This is not what happened
jernfrost 11y ago
This is how it has to be. This short sighted race to the bottom will not benefit anybody in the long run. I have no sympathy for big multinationals which make a bucket load of money but still shopping around the world to get even less taxes. It is really just a variation of big multinationals going to corrupt 3rd world countries and getting an unreasonable sweet deal from a dictator. When the dictator is thrown out and a democratic government gets in charge, the multinationals cry that their previous deal is renegaded. The point is that any multinational has to take into consideration what it is reasonable to expect. If a deal is too sweet to be expected to last you don't get into it and start crying about it being revoked later.

40 points by ghosh 11y ago

stefanix 11y ago

So dumb to make this about US vs EU when this is about closing tax loopholes for multinationals.

ptha 11y ago
The majority of the tax to be recovered are actually related to European and not US companies: "While declining to name the companies who benefitted from the tax scheme, Commissioner Vestager said that €500 million of the total tax bill of €700 million related to European companies, a development that may appease critics of the European Commission who have accused Brussels of unfairly targeting US multinationals." http://www.irishtimes.com/business/vestager-denies-delay-in-probing-ireland-s-apple-tax-deal-1.2492451 http://www.irishtimes.com/business/vestager-denies-delay-in-...
lugus35 11y ago
Actually, it's Belgium vs UE commission. And investors end up the laughing stock.
mcv 11y ago
Yeah, it's not EU vs US, it's EU closing a Belgian tax loophole for non-EU multinationals that the US had already criticized. EU and US seem to be on the same side here. Except for Belgium.

Oletros 11y ago

The title is totally click bait

to3m 11y ago
The picture is awesome too.

golergka 11y ago

So, (1) companies adhered to Belgium laws, (2) Belgium laws were found to be violating international agreements and (3) _companies_ are supposed to pay for it? What the fuck? Why doesn't Belgium pay for its violation itself? Why someone who was adhering to the law would need to pay because the law was found to be wrong? I must have misunderstood this somehow, because this is just too idiotic otherwise.

frigg 11y ago
>I must have misunderstood this somehow, because this is just too idiotic otherwise. You did misunderstood. Belgium incorrectly offered tax aid to companies and now it's required to rectify it, hence said companies must pay what is legally required.
- golergka 11y ago
  > Belgium incorrectly offered tax aid to companies and now it's required to rectify it, OK, that's reasonable. > hence said companies must pay what is legally required. And here I get a huge WTF. If someone gave me money that he couldn't give me (for example, he stole it), I'm not required to give it back — he is. Why isn't Belgium held responsible for it's actions?
  - FeepingCreature 11y ago
    > If someone gave me money that he couldn't give me (for example, he stole it) What's happening here is that the person never had the legal right to give you that money. So you're in factual possession of money that you don't - can't - legally own.
  - tremon 11y ago
    I think it's a matter of framing the issue. Tax deals and rebates are already subject to reinterpretation. Even personal income tax can be re-evaluated later (up to seven years in NL, I believe). This is not a fine, it is a tax correction. These happen all the time, especially with complex tax structures that multinational businesses use.

igl 11y ago

Meh. What about Holland and Luxemburg?

mpweiher 11y ago
One step at a time.
tremon 11y ago
what about them?
- mattmanser 11y ago
  He's referring to the double-Irish arrangement, a similarly dodgy tax scheme used by multinationals: https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement
lugus35 11y ago
"Luxembourg under Junker premiership had turned into a major European centre of corporate tax avoidance." https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controversies https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controvers...

userulluipeste 11y ago

So let's suppose I am a company that saw a green field to extend to - a country which gets out of its way to entice me to come and develop there. Now I am in their yard, keeping my part of the bargain, the moment in which they draw out their claws and looking hungry at me say "you know what, forget what we've told you, it wasn't good anyway, so let's make a new deal".

snarfy 11y ago
I think it's fitting. When they move their business out of country to avoid taxes they can't expect the same legal protections. I'm going to laugh when these businesses move to China and the government seizes them for national interests. By avoiding taxes they are starving the dog that protects them.
- userulluipeste 11y ago
  A company extends itself into different countries for a lot of different reasons, not only for avoiding taxes. Besides the mentioned tax cuts, the move into Belgium could have been also because they needed a foothold somewhere in European Union anyway, and also it could have been for some level of expertise that was harder to achieve otherwise, and possibly a lot more. It's about the whole package. China has a policy of allowing external players into its playground only in partnership with a local company over which the government has absolute power and control. That is a bitter pill to swallow, but some choose to take it any way! China can arbitrarily change its rules (which are bad enough as they are) at any time (usually into something worse), I'll give you that. But it doesn't make it feel better with going through the current Belgian/EU debacle!
Oletros 11y ago
This is not what happened

jernfrost 11y ago

This is how it has to be. This short sighted race to the bottom will not benefit anybody in the long run. I have no sympathy for big multinationals which make a bucket load of money but still shopping around the world to get even less taxes. It is really just a variation of big multinationals going to corrupt 3rd world countries and getting an unreasonable sweet deal from a dictator. When the dictator is thrown out and a democratic government gets in charge, the multinationals cry that their previous deal is renegaded. The point is that any multinational has to take into consideration what it is reasonable to expect. If a deal is too sweet to be expected to last you don't get into it and start crying about it being revoked later.