Europe’s two biggest economies are clamping down on tech companies exploiting tax loopholes on the continent. France and Germany believe companies are taking advantage and stealing market share. While Apple is the focus of the new rules, companies like Google and Microsoft are also in the cross-hairs.
France will lead the initiative and will prepare a proposal for “simpler rules” that will create “real taxation” and stop companies that “minimize taxes and grab market share”.
The drafted rules will be considered in September during a European Union meeting. France finance minister Bruno Le Maire believes with German input, Europe-wide rules can be implemented more rapidly. While Germany is not working with France, it is believed to be working on its own similar laws.
“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. “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.”
Recently elected French President, Emmanuel Macron, is notably a critic of the way tech companies exploit tax loopholes. He has committed to creating a fair system
Tech Companies vs. Europe
Apple’s problems with European tax are well known. The company is in the midst of a legal struggle with the European Commission over its illegal state aid from Ireland. If punished, Apple could be forced to pay $14.5 billion in back taxes.
The Commission, Europe’s regulatory body has also come down hard on Microsoft and Google, albeit for non-tax issues.
Just today, Microsoft announced it paid a lowly $30 million in income tax in the United States last year. Part of the reason for the low amount is because of the company’s divisions in low tax regions. France and Germany would like to see such practices halted.