The great European tax disaster
Enrique Dans
Senior Advisor for Innovation and Digital Transformation at IE University. Changing education to change the world...
After many years of seeing US companies harassed by the European Union financial and tax authorities, the US Treasury Department has finally lost its patience and wrote a harsh report accusing Brussels of being biased against US companies, and stating that the EU’s Competition Commissioner Margrethe Vestager was in danger of overstepping its bounds “beyond enforcement of competition and state aid law under the TFEU [Treaty on the Functioning of the EU] into that of a supra-national tax authority.”
Before anybody accuses me of defending tax dodgers, I should repeat what I have said on many occasions: companies are required to obey the law; but because Europe is a disaster area in legislative terms, it is possible to get round the law and pay ridiculously low levels of tax. Here are some of my previous articles about it:
- "Incompetent Europe"
- "Death and taxes"
- "The law, multinationals, and fair taxes"
- "Tax self-righteousness"
- "Are technology companies really that different?"
This is clearly not a good thing. Companies should pay the taxes they are due for their activities in each country where they make a profit. But Europe has proved unable to establish a common tax policy and implement measures to prevent this happening.
In other word’s Europe’s problem isn’t US companies, but the fact that The Netherlands, Ireland, the Isle of Man, Jersey, Liechtenstein or Luxembourg, among other countries used as tax havens, each do their utmost to attract investment by offering low taxes. Picking out a company like Apple and forcing it to pay arbitrarily decided taxes will not solve anything, and only generate protest from the other side of the Atlantic.
In short: if a company obeys the law it should be left alone, if it breaks it, then apply a fine or a sanction. Companies are required to make money for their shareholders, obey the law to the letter. Everything else is hypocrisy and covering up incompetence.
The US authorities are right to protest: either Europe gets its tax act together, creating harmonized legislation, or it should accept that US companies are in fact obeying the law, laws that many European companies use to their advantage as well. It would appear that US companies are being singled out unfairly.
This ongoing tax shambles only illustrates once again that the current “half-way Europe” is a disaster that nobody knows how to solve.
(En espa?ol, aquí)
Founder & CEO — STRIKING IDEAS LLC
8 年Hello Enrique - most comments to your article appear to see this issue through a transactional lens. The bigger issue you have evoked is that governments too are now moving a way from righteous and moral ground. The tax revenues when viewed as a tool for somehow maximizing the treasury bucket without paying heed to what is morally right - such polarity seems to be justified by those who look at opportunists ways to somehow make the best. Thereby as you rightly pointed out it those across the Atlantic fall prey to being biased to US companies. How many times have lawmakers viewed something with a myopic ways and created laws that miss the big picture. Talk about PBA Benevolence Cards that is perfectly legal in NYC that in some ways is a way to legalize corruption.
Business Development Alliances Director | Cloud Security Architect | Cybersecurity | Cloud Security | Digital Transformation | Platform Security
8 年Puede que sea correcto, pero no es justo.....o es al contrario? ;-)
Profesional de Contabilidad
8 年Hay mucho para PENSAR? ??