Germany is again demanding mammoth American firms like Facebook, Apple, Amazon, and Google pay their fair share of taxes in countries where they operate in Europe and not only in those countries that house their headquarters.
German finance minister Olaf Scholz says it's time for a global approach to solving this festering issue that deprives countries of millions of dollars in taxes rightfully doe them. American tech firms are notorious for blatantly resorting to tax avoidance to pay as little taxes as possible despite their huge incomes.
Tax avoidance is the legal exploitation of a country's tax regime to reduce the amount of tax due by means within the law.
"I think we should find a global agreement on that question, this would help a lot," said Scholz.
He is delighted a "common approach" is being taken in the U.S., likely referring to American efforts to apply a minimum tax rate on multinational companies that operate in low-tax jurisdictions.
"My biggest concern with the tech companies is that they tend to pay taxes nowhere," said Scholz.
Google, Amazon, Facebook, and Apple continue to face intense criticism from politicians on the continent for not paying enough taxes. European countries claim that much of the activity of tech firms aren't actually being taxed.
Scholz made a similar demand in October 2018 when he called for a global minimum tax on large technology companies. He said this move will ensure tech firms pay taxes in the countries in which they generate revenue rather than only in countries where they're headquartered.
"We need a worldwide minimum tax level that no state may go below," urged Scholz. "We require coordinated mechanisms which prevent the displacement of revenues to tax havens."
Google, Apple, Facebook, and Amazon establish European headquarters in countries with low corporate tax rates, such as Ireland and Luxembourg. This tax avoidance tactic hasn't stopped other countries, including France, Italy, and the UK, from pursuing tax revenue they feel they're saying is due them.
France is taking stern action against tax avoidance. Last month, France unveiled a tax proposal targeting 30 mainly American tech firms and those from a few other countries.
This legislative effort intends to end tax avoidance and advance fiscal justice at a time when rampant American tax avoidance continues to deny countries the taxes they say are rightly due them.
The new tax law put unveiled by Minister of the Economy and Finance Bruno Le Maire will charge 3 percent on French revenue and might yield over $565 million (€500 million) in tax revenue. The tax targets firms with $850 million (€750 million) in global revenue and $28 million (€25 million) in French revenue.
