U.S. and Europe May Collide on Taxing Apple and Amazon
“All of these other countries are basically trying to beef up
and protect their tax base by ensuring foreign multinationals pay tax on income earned in their country,” he added, “and not on income earned by their own domestic multinationals.”
This is a different tack from the one taken in the United States, where tax dodges by homegrown billion-dollar
corporations have been criticized for increasing the tax burden on companies that can’t shield assets
Without tough safeguards, for example, the shift away from a worldwide system could end up curbing rather than promoting
investment at home as American companies move even more operations overseas to avoid paying any United States taxes.
taxes the worldwide profits of American corporations, but the tax kicks in only after that income is repatriated to the United States.
At the same time, the official corporate rate would be slashed to 20 percent, from
35 percent, to make American companies more competitive with their foreign rivals.
“We have to address this problem before the Europeans get there first.”
The rulings on Amazon and Apple — which those companies are disputing — are byproducts of a race among
governments to lure corporate giants to their shores in the hunt for new sources of revenue.
Yet it could turn out that the European crackdown on American multinationals will ultimately
help — rather than hobble — Washington’s efforts to get them to pay up.
