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The problem seems to be rooted within the EU itself with Ireland, Luxembourg and others allowing these companies to pay little or not taxes.

• StavrosK 9y ago
  Isn't that exactly what the article says? That's why the EU is trying to fix it.
  • dogma1138 9y ago
    The EU very skillfully and intentionally crafted the current Dutch Sandwich style scheme by essentially legislating tax heavens in various EU and quasi EU territories (the EU outermost territories make it a very fun map to look at). The thought behind it was to both attract large companies to pay tax in the EU and allow EU multinationals to remain competitive without having to go somewhere else. But a lot has changed the EU became less and less competitive and it didn’t really manage to bootstrap any new giants and lost a lot of its former ones. The plan also did not account for companies like Google, Microsoft and Apple to exist with their market cap nor that companies would love nothing more than to sit on piles of cash that amount to the entire GDP of Europe when those laws were legislated. Now with US companies actually repatriating cash the EU is basically looking for a new way to get some of that money back and more.
• tdb7893 9y ago
  The problem is that if those countries raise their taxes companies will just find other tax havens. I think that's why they are trying to find a solution that will work no matter where someone is technically headquartered
  • AstralStorm 9y ago
    You cannot move latency sensitive infrastructure easily if at all. (Most of networking infrastructure including cloud services.) At least once laws relating revenue (not income) at location to tax at location committee into play. Otherwise everyone would already operate out of Christmas Islands etc.
• derriz 9y ago
  Ireland's corporate tax rate is 12.5% which is in the lower half of the table of EU rates but that's no basis to brand it a "tax haven". People get riled up because of an exclusively American twist to their corporate tax rule which allows American companies to defer paying US corporate tax on foreign earnings until the money is "repatriated". This is why you never see UK, German, Japanese, etc. companies use Ireland as a tax "haven". Ireland follows international law in taxing multinationals on the profits generated in Ireland. When you hear a claim along the lines of "Apple only pays 2% on its revenues in Ireland", it's because the vast majority of the profit is taxable in the US not in Ireland but payment is deferred because of this US tax loophole. Just because the cash hasn't been handed over to Uncle Sam, doesn't mean it isn't due. It's perfectly understandable that the US government is unhappy at this attempt by a foreign government to grab corporate tax which by all international standards belongs to the US treasury. If the EU (and I'm a proud European) wants a share of digital tax, then they should grow their own profitable tech companies to tax instead of selectively eyeing up US tech companies. The US doesn't get to impose corporate tax on German car makers or French wine producers - nor should the EU get to impose a corporate tax on US tech companies.
  • FigBug 9y ago
    On car makers or wine producers the US can impose import duties i.e. 25% on light trucks. There is no equivalent to import duties for online businesses, hence this tax plan.
    • derriz 9y ago
      Sure every country can just impose duties on imports. But it's an impoverishing move for the planet. The last time every country believed this was a good idea was in the 1930s and it lead to economic devestation and arguably contributed to WW2.
  • mdekkers 9y ago
    The US doesn't get to impose corporate tax on German car makers or French wine producers Yes they do, they are called import and excise duties, and they currently don't apply to services, which is what the EU is going after.