Multinationals like coffee chain Starbucks Corp and online retailer Amazon.com Inc pay less tax in Austria than one of the country’s tiny sausage stands, the republic’s center-left chancellor lamented in an interview published on Friday.
Austrian Chancellor Christian Kern, head of the Social Democrats and of the centrist coalition government, also criticized Internet giants Google and Facebook Inc, saying that if they paid more, tax subsidies for print media could increase.
“Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” Kern was quoted as saying in an interview with newspaper Der Standard, invoking two potent symbols of the Austrian capital’s food culture.
“That goes for Starbucks, Amazon and other companies,” he said, praising the European Commission’s ruling this week that Apple should pay up to 13 billion euros (US$14.5 billion) in taxes plus interest to Ireland, because a special scheme to route profits through that country was illegal state aid.
Apple has said it will appeal the ruling, which chief executive officer Tim Cook described as “total political crap.”
Google, Facebook and other multinational companies say they follow all tax rules.
Ireland’s Cabinet on Friday agreed to join Apple in appealing against a multibillion-euro back tax demand, while a European Commission spokesperson said In Brussels that “the commission will defend its decision in court.”
Kern criticized EU states with low-tax regimes that have lured multinationals — and come under scrutiny from Brussels.
“What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” he said.
He stopped short of saying that Facebook and Google would have to pay more tax, but underlined their significant sales in Austria, which he estimated at more than 100 million euros each, and their relatively small numbers of employees — a “good dozen” for Google and “allegedly even fewer” for Facebook.
The commission’s ruling this week against Apple has angered Washington, which accuses the EU of trying to grab tax revenue that should go to the US government.
With transatlantic tensions rising, the White House said US President Barack Obama would raise the issue of tax avoidance by some multinational corporations at a summit of the G20 leading economies in China this weekend.
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