Get the Lowest Prices anywhere on Macs, iPads and Apple Watches: Apple Price Guides updated April 19th
 

 

Apple & other tech giants may face EU universal minimum tax rate in the future

Apple and other major companies should be subjected to a minimum rate of corporation tax in all countries, Germany's finance minister has proposed, in order to prevent technology giants and other multinational organizations from evading taxes, despite the multinationals presently obeying all the laws presently in place.




Finance minister Olaf Scholz insists there needs to be a "worldwide minimum tax level that no state may go below," in relation to corporation tax. The lofty goal, which would require an agreement by practically all countries if it were ever put into practice, would ensure companies would pay governments a considerable amount of tax, regardless of any financial trickery the firms perform to minimize their tax outlay.

Failing to comply with the proposal would be met by tougher measures than are currently available for regulators.

Writing in a guest article for Welt am Sonntag and spotted by Reuters the minister advised the measure was considered alongside similar ideas being discussed by France over the matter, to encourage firms like Apple, Amazon, and Google to pay a fair amount of domestic taxes in each market they operate within, instead of siphoning off revenue through another country with a far lower rate of tax.

Scholz advises the rules would also need to make it harder for firms to shift funds to tax havens, where it could accumulate and avoid most taxes. According to Scholz, the Internet economy is "exacerbating the problem" caused by globalization, and making it easier to place "profits in low-tax locations."

Though seemingly impractical to set up at a global scale, the proposal is part of continued efforts by the European Union to try and get companies like Apple to pay more tax. Europe has tried to harmonize the tax rates across the entire union, but countries like Ireland who offer very low tax rates are resisting such efforts.

Scholz's comments follow after September's denial of a report the ministry had given up on plans to raise taxes on tech firms, allegedly because "demonization" of such firms was "not productive." While the report was based on internal documents, a spokesperson claimed they were "very selectively" cited as one of many options, and assured the finance minister had yet to make a decision on one or more tax instruments.

In March, the European Commission revealed plans that would require large firms to pay taxes all over the E.U., rather than just in the country of their regional headquarters.

Apple is considered to be a major target of the proposals, in part due to its high revenue in Europe that it funnels through its headquarters in Ireland.

A 2016 ruling by the European Commission declared Ireland had to collect billions in back taxes from Apple, after being found to have extended preferential tax treatment to the company. Apple has since paid the entire 13.1 billion euro ($15.3 billion) balance, as well as 1.2 billion euro in interest, into an escrow account controlled by the Irish government.

Both Apple and Ireland are appealing the ruling this fall.