U.S. tech giants have long been criticized for turning to tax dodging schemes, but these tactics might come to an end later this year if a new approach that France and Germany are working on is being adopted by all members of the European Union.
Specifically, the two countries are seeking what they describe as “real taxation,” planning to adopt simpler rules that would block companies from turning to loopholes in order to avoid paying taxes, or to reduce them, in markets across Europe.
According to a new report, France will kick things off by proposing “simpler rules” for taxing tech giants. These will be revealed at a meeting with EU officials in mid-September.
“Europe must learn to defend its economic interest much more firmly — China does it, the U.S. does it,” French Finance Minister Bruno Le Maire said in an interview published by Bloomberg. “You cannot take the benefit of doing business in France or in Europe without paying the taxes that other companies — French or European companies — are paying.”
Germany will be putting forward proposals following its national election on September 24, said Denis Kolberg, a finance ministry spokesman.
“The push reflects mounting frustration among some governments, regulators and, indeed, voters, at the way international firms sidestep taxes by shifting profits and costs to wherever they are taxed most advantageously — exploiting loopholes or special deals granted by friendly states,” reads the Bloomberg report.
Apple in particular is a big target of the new regulations, as the Cupertino-based company has recently been ordered to pay $15.2 billion following a tax scheme that involved Ireland. The European Commission ruled that Apple had been granted illegal tax benefits in the country, but with both the iPhone maker and Ireland appealing the decision, it would take a long time until a final ruling is made.
In addition to Apple, other tech giants like Google, Facebook, Amazon, and even Microsoft are said to be in the cross hairs of the new tax initiative, as all have been accused of turning to financial maneuvering to minimize taxes.