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France takes on Apple in tax dispute… and wins

The French government has bagged a win in its quest to hold Silicon Valley accountable to fair and reasonable taxation rules with €500 million secured from Apple.

Apple has confirmed to Reuters it has settled a dispute over taxes due to the French purses over a 10-year period, though local newspapers are suggesting the figure is roughly €500 million. France is leaking the European battle against the slippery accountants of the internet giants, though whether this has any knock-on effect across the rest of the bloc remains to be seen. We suspect there will be a mixed reaction.

“As a multinational company, Apple is regularly audited by fiscal authorities around the world,” Apple France said in a statement to Reuters. “The French tax administration recently concluded a multi-year audit on the company’s French accounts, and those details will be published in our public accounts.”

The taxation strategies of the internet giants have become infamous over the years, as many feel the frat-boys of the technology industry are taking advantage. With such incredible revenues, governments will be keen to hold these companies accountable and France is showing that it can actually be done.

Over the last few months, the European Commission has been tabling various different ideas to ensure the internet giants pay a fair and reasonable tax rate. A 3% sales tax on all revenues generated in the specific territories looked to be the best option moving forward, but the power of the bloc proved to be its downfall; getting 28 nations to agree to the same idea was never going to be easy.

With countries like Ireland and Luxembourg building successful economies around enabling tax havens, and other countries such as Sweden giving birth to companies which benefit from the rules, some were always going to offer opposition. Why would these countries want to be the architect of their own downfall?

What this victory for France shows the rest of the bloc is that results can be achieved by going alone. Some of the other critics of the creative taxation strategies of the internet giants, such as the UK and Germany, may well move forward aggressively.

The residents of Silicon Valley, and some in Washington DC, might suggest US companies are victims of sticky-fingered bureaucrats, though it is difficult to have sympathy for companies which have become experts at finding and widening gaps in regulations.

The big question is who is next on France’s hit list.


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