TAXATION

Starbucks, Amazon pay less tax than a sausage stand, Austria says

PUBLISHED : Saturday, 03 September, 2016, 9:24pm
UPDATED : Sunday, 04 September, 2016, 2:39pm

Multinationals like coffee chain Starbucks and online retailer Amazon pay less tax in Austria than one of the country’s tiny sausage stands, the republic’s centre-left chancellor lamented in an interview published on Friday.

Chancellor Christian Kern, head of the Social Democrats and of the centrist coalition government, also criticised internet giants Google and Facebook, 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
Chancellor Christian Kern

“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 (HK$112 billion) in taxes plus interest to Ireland because a special scheme to route profits through that country was illegal state aid.

In response, The United States accused the EU of grabbing revenue intended for US coffers.

The Apple row was the latest spat between Brussels and Washington over company regulation. Last month, the Treasury issued a detailed legal argument that the EU Commission’s approach went against European laws.

Apple has said it will appeal the EU ruling, which Chief Executive Tim Cook described as “total political crap”.

Google, Facebook and other multinational companies say they follow all tax rules.

Kern criticised 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 each, and their relatively small numbers of employees – a “good dozen” for Google and “allegedly even fewer” for Facebook.

“They massively suck up the advertising volume that comes out of the economy but pay neither corporation tax nor advertising duty in Austria,” said Kern, who became chancellor in May.