The EU’s top economic affairs official on Monday said that companies should pay taxes where they earn profits, days after a report of another firm using aggressive strategies to lower their bill.
When asked about a report that the world’s top furniture company IKEA might have underpaid taxes by 1 billion euros (US$1.1 billion) using aggressive tax strategies, European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said “a company should pay taxes where they generate profits.”
He told journalists during a visit to the southern French city of Toulouse that “we’ve had enough of multinational firms benefitting from this or that favorable rule ... to avoid paying tax where they did business to pay little in taxes in countries where the rates are low.”
He declined to name any company.
However, the Green/EFA group in the European Parliament on Friday last week said it had commissioned research that shows IKEA “structured itself to dodge 1 billion euros in taxes over the last six years using onshore European tax havens.”
The European Commission said on Saturday it would examine the claims, while IKEA defended its management of its tax affairs.
Moscovici last month announced a raft of measures to combat tax avoidance, in addition to EU investigations under way into the tax deals of major groups such as Apple Inc, Starbucks Corp and McDonald’s.
The measures from the European Commission call for big companies to be obliged to report profit country by country — a break with the previous practice that allowed multinationals to secretly shift revenue across borders to save on tax.
Another requirement will compel nations to agree on minimum standards for drawing up tax rules, so that multinationals stop the practice of shopping around for loopholes to avoid paying tax altogether.
The initiative comes amid growing public outrage about tax avoidance by multinational corporations.
Last month Google agreed to pay £130 million (US$185.4 million) in back taxes to Britain after a scathing government inquiry into the search giant’s tax arrangements.
British Chancellor of the Exchequer George Osborne hailed the agreement as a victory, but the sum provoked a barrage of criticism for being too low.
Moscovici said that small and medium-sized businesses “pay on average 30 percent more in corporate taxes than multinationals. That can’t, shouldn’t continue.”
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the