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America is angry about Europe's tax investigations
An eyeliner-clad official from the US treasury has traveled to Brussels to scream leave Google alone! at their European counterparts. International tax chief Robert Stack has accused the European Union of unfairly targeting American tech companies in its recent clampdown on tax avoidance. The continent has begun investigating "sweetheart" deals between firms like Facebook and Apple after it was revealed how little tax they actually pay. Stack, however, feels that he's got to go to bat for the homegrown champions, and that the money Europe is going after isn't theirs to claim.
Google will pay the UK $185 million in back taxes
Like other tech giants, Google has been accused of using legal loopholes to avoid paying many of the taxes it owes... and it's now tackling some of those claims head-on. Its parent company Alphabet has reached a deal with the UK to pay £130 million (about $185 million) in back taxes going as far as 2005. The settlement reflects a new, more direct approach that bases its payout on revenue from UK-based advertisers. In short, its taxes will reflect the actual size of its UK business -- logical, isn't it?
Apple fined $347 million for Italian tax... irregularities
Apple's Italian subsidiary has reportedly been slapped with a €318 million ($347 million) bill for failing to pay tax in the country. According to the BBC and La Repubblica, authorities found disparities between the amount of money it brought in and the amount it handed over between 2008 and 2013. In that five-year period, it's believed that the firm paid just €30 million ($33 million), significantly less than the €880 million ($961 million) it's believed to have owed.
US tech companies have stashed over $420 billion overseas
It's no secret that the US government wants companies to bring more of their offshore profits back home for the sake of taxes, and it's now exceptionally clear as to why. Bloomberg has sifted through financial filings and discovered that the top eight American tech firms, including Apple, Google and Microsoft, are keeping more than $420 billion overseas -- $69 billion of it added in just the past year. That's over a fifth of the $2.1 trillion held abroad by American companies, and would easily cover a lot of government expenses. A tax on Microsoft's recent profits alone ($29.6 billion) would cover NASA and the Commerce Department for a year; Apple ($23.3 billion) could take care of the Transportation Department and Social Security, and Oracle could foot the bill for the Labor Department.
Google to kill News service in Spain due to new law
Google News for Spain will be nothing but a memory after December 16th. The tech titan has announced that it's shutting down the service in the country, half a month before what's dubbed as the "Google tax" law takes effect on January 1st, 2015. This law, which the parliament passed in October, will require Google to pay websites for publishing any part of their content (even if it's just a headline) on its News page. It doesn't matter if a publisher doesn't agree with the law either: nobody can opt out. Instead of paying up, though, the company has chosen to kill the service completely -- it claims it doesn't make money from News as it doesn't display ads on the site, so shelling out money for licensing fees isn't viable. Also, Google will stop showing Spanish websites in any edition of News, even if it's for another Spanish-speaking country.
Spain is making Google (and others) pay news publishers a tax
For companies like Google, facing problems with the law across Europe has become a common thing. The most recent example of this is now taking place in Spain, where the country's parliament just gave the go-ahead to what's being known as the "Google Tax," a set of intellectual property laws that lets news publishers get paid every time their content is linked within search results. Last year, something very similar happened in Germany, and that fight ended recently with Google having to strip down its news service to accommodate the requests of German publishers.
Ireland will eliminate Apple's sweet tax deal within four years
Apple and other tech giants had better not lean too heavily on Ireland's super-favorable tax environment; at least one big perk is going away. Finance minister Michael Noonan has detailed a new budget that, among other things, will phase out the "double Irish" system that let companies operating in Ireland (including Apple) move their revenue to an Ireland-registered offshore tax haven. As of 2015, companies incorporated in the country will have four years to make sure that they're also tax resident -- that is, they'll pay the same as any other corporation operating on the Emerald Isle.
The EU is investigating Amazon for a potentially illegal tax deal
After setting Apple firmly in its crosshairs, the European Commission is now targeting retail giant Amazon's tax dealings. In a press release this morning, the Commission announced it's opened an "in-depth investigation" into the company's tax status in the tiny country of Luxembourg -- home to Amazon's European subsidiary. Since 2003, Amazon has recorded the majority of its regional profits in the country, but those profits are not taxed there. As with the aforementioned Apple probe, the Commission believes that the favorable tax deal is tantamount to illegal state aid, and will now investigate Amazon and Luxembourg in an attempt to prove that. So far, Luxembourg has failed to fully comply with requests for further information, but with the Commission turning up the heat, it's unlikely that either party will be able to hide from the investigation.
EU says Apple's Irish tax deal is illegal
An EU commission has accused Ireland of granting "state aid" tax breaks to Apple that may break market rules. That was the result of an investigation by the Organisation for Economic Cooperation and Development (OECD) over Irish deals brokered in 1991 and 2007. It has now asked Ireland to provide more information about its tax arrangements with Apple and other companies, including Fiat and Starbucks. The OECD also looking into Luxembourg and the Netherlands as part of a larger probe to find out if certain EU nations help multinational companies swerve taxes. At 12.5 percent, Ireland has a lower tax rate than any other EU country, and Cupertino's complex tax deals there have been questioned before. As the US Senate saw recently, shuffling money around countries helps Apple avoid nearly $20 million a day in taxes -- and the EU seems to have a dimmer view of its strategy than the SEC did. [Image credit: pieceoplastic/Flickr]
Europe opens investigation into Apple's tax deals
Apple has said on more than one occasion that it pays its fair share of taxes, but it appears that the European Commission isn't so sure. Today, the regulator confirmed it's launched an investigation into whether the company is enjoying better tax deals than are warranted under EU law. It all centers around Apple's Irish subsidiaries, Apple Sales International and Apple Operations Europe, which may have benefited from pricing arrangements that allowed it to minimize the overall amount of tax it paid. At 12.5 percent, Ireland's business tax rate is lower than most EU member states, but Apple has previously been accused of securing rates as low as 2 percent.
