European Union could charge Apple tax based on its global revenue

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Apple waives developer fees for nonprofits, others in 8 additional countries
The EU is looking for a way to clamp down on tax avoidance.
Photo: Ste Smith/Cult of Mac

Apple is among the tech giants which could be affected by a new European Union initiative that aims to tax tech multinationals at between 2 to 6 percent of their global revenue.

News of the massive potential tax shift was shared by French Finance Minister Bruno Le Maire in a newspaper interview. Le Maire said that the total amount is likely to be “closer to 2 percent than 6 percent,” and will be announced in the coming weeks.

“It’s a starting point,” he said. “I prefer a text that will be implemented very quickly rather than endless negotiations. We will fine tune it later.”

The proposal is an attempt to sidestep the problem of multinational companies shifting profits around as a way of avoiding paying tax in different countries. A previous draft European Commission document proposed a levy based on where the customer, rather than the company, is located. The tax would also be based on the company’s “aggregated gross revenues,” as opposed to profits.

The main countries pushing for the tax overhaul include Italy, Germany, Spain, and France. Ireland and other smaller countries have opposed the changes, due to their being hubs for tech company investments.

Apple’s battles with the European Union

This isn’t the first time Apple has battled with the EU. The European Union handed Apple a 13 billion euros ($15.5 billion) tax bill in August 2016, claiming that the company took advantage of illegal state aid that allowed it to route profits through Ireland. The investigation alleged that Apple paid the equivalent of as little as 0.005 percent on all European profits in 2014.

At the start of this year, Apple Europe separately agreed to pay an additional $186 million, including interest on unpaid tax, after an “extensive audit” by HM Revenue and Customs, the U.K. government department responsible for the collection of taxes.

Source: Reuters