In the continuing battle between European and US tech companies, score one for Europe.
In a move that could put pressure on its rivals to follow suit, Amazon.com Inc plans to start paying taxes in a number of European nations where it has large operations, instead of funneling nearly all its sales through Luxembourg, a low-tax haven that is the home base in the region for Amazon and many other large tech companies.
Several European nations, including Germany and France, have criticized the tax strategies of some US tech companies, including Google, which use complicated structures that sharply reduce the amount of tax they pay in individual European markets.
The European Commission is also investigating whether Apple Inc and Amazon receive unfair state support through low-tax agreements in Ireland and Luxembourg respectively, where the companies run their European operations.
On May 1, Amazon said that it had started reporting revenue from its operations in Britain, Germany, Italy and Spain. By altering how it reports its revenue, the online retailer might become liable for larger tax charges in certain nations, although it might still be able to reduce its tax burden through other complex accounting practices.
Amazon reported a 14 percent rise in European revenue, to 13.6 billion euros (US$14.92 billion), in 2013 (the latest full-year figures available), according to company filings.
“We regularly review our business structure to ensure that we are able to best serve our customers,” Amazon said in a statement on Sunday.
The company added that the changes to how it reported revenue from its European operations had started more than two years ago.
A spokesman declined to say whether the changes were because of growing pressure from European policymakers on US tech companies to pay more tax on their operations in the 28-member EU.
The news of changes to Amazon’s tax structure was reported this month by the Guardian.
Amazon faces other pressures in Europe, too. In Germany, local unions have held a series of strikes over employee treatment. Both sides have clashed over how much Amazon’s workers should be paid and other benefits mandated under German law.
The changes to the company’s tax arrangements, however, are likely to put pressure on other tech companies in the US that funnel the majority of their European revenue through low-tax countries like Ireland and the Netherlands.
In Britain, British Chancellor of the Exchequer George Osborne has championed a so-called “Google Tax” that imposes a 25 percent tax on the local profits of international companies that are perceived to route money unfairly overseas. The new policy came into effect last month.
And in response to mounting criticism from other European nations, Ireland announced late last year that it would phase out a tax loophole called the “Double Irish” that would often be used by tech companies. The structure allows corporations with operations in Ireland to make royalty payments for intellectual property to a separate Irish-registered subsidiary. That subsidiary, though incorporated in Ireland, typically has its home in a country that has no corporate income tax.
The Double Irish policy has allowed companies like Google to limit how much tax they pay on their international operations. The policy was phased out for new companies at the beginning of the year and is to be stopped entirely by the end of the decade.
Yet, despite the growing clampdown on tax structures used by US tech companies and others, analysts say that European nation are still vying to attract international companies through low-tax policies.
Britain, Ireland and the Netherlands have created new policies that allow companies to apply for a lower tax rate on profits that result from certain patents that are held locally.
However, the European Commission is reviewing the legality of these so-called “patent boxes.”
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
BAD RAP: The exchange said Tatung had seriously breached shareholders’ rights and failed to give a satisfactory explanation of its board election dispute Tatung Co (大同) shares yesterday plunged by the maximum daily limit of 10 percent to NT$18.90, the lowest in three months, after the Taiwan Stock Exchange (TWSE) on Tuesday evening changed the company’s classification to a full-delivery stock effective tomorrow. The TWSE’s move follows the company’s failure to give a clear and satisfactory explanation of why it deprived dozens of shareholders of their voting rights during a board election at the annual shareholders’ meeting on Tuesday morning. Under the exchange’s regulations, investors are not allowed to engage in margin trading of a full-delivery stock, TWSE spokeswoman Rebecca Chen (陳麗卿) told
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate