German finance minister blasts tech giants which ‘pay taxes nowhere’

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Cash app with cash money
Apple has previously battled the EU over tax avoidance.
Photo: Ian Fuchs/Cult of Mac

Germany’s finance minister Olaf Scholz has slammed tech giants that “pay taxes nowhere.”

It’s the latest shot at tech giants such as Apple, Google, Facebook and Amazon which have previously clashed with the European Union on tax issues. In an interview with CNBC, Scholz argued that “we should find a global agreement” to shut tax avoidance loopholes.

Scholz’s words come at a time when more and more EU countries are seemingly taking steps to address this issue. France is introducing a 3 percent tax on the revenue of tech giants which earn more than 750 million euros ($843 million) worldwide per year.

The U.K., meanwhile, has proposed a 2 percent digital services tax on tech firms which make more than £500 million ($653 million) per year.

One particular bone of content is that certain aspects of tech companies’ business — such as online advertising — is not taxed. EU Competition Commissioner Margrethe Vestager has said that Europe should “take the lead” on coming up with a way to address this issue. From Olaf Scholz’s commnets, however, it seems like he would much prefer a global agreement to be struck on this topic.

In a previous op-ed for a German newspaper, Scholz proposed a global minimum rate of corporation tax as one way to ensure that multinationals pay domestic taxes in line with the profits they earn.

Apple and international taxes

The European Union famously handed Apple a 13 billion euros ($15.5 billion) tax bill in August 2016. It did this after claiming that Apple took advantage of illegal state aid that let it route profits through Ireland. An investigation alleged that Apple paid the equivalent of as little as 0.005 percent on all European profits in 2014.

Apple has always argued that it pays every cent of tax that it owes. During a 2015 “Inside Apple” episode of 60 Minutes, Tim Cook labelled reports that Apple doesn’t pay its taxes as, “total political crap.” He also said that tax codes should be redesigned for the digital age. Apple co-founder Steve Wozniak has suggested that Apple should pay more than it currently does.

Source: CNBC