Google Inc (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN) and other multinational corporations – yes, that even means Apple Inc. (NASDAQ:AAPL), which went before a Senate investigations committee Tuesday – have become huge distractions for leaders of the European Union. As soon as the leaders start to turn their focus onto other policies, these multinationals and their “tax-dodging schemes” become the shiny thing that EU leaders just can’t ignore. Now, these leaders are deciding to change their focus again. Instead of devoting their energy on an energy summit in Brussels that started today, they now want to turn their energy to taxation and try to come up with a framework for ensuring that multinationals pay their dreaded “fair share” of taxes.
The discussion has been going on for months, as Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) have both testified before EU commission and various national committees in several countries to discuss their tax bills and dig into how they run their businesses so that they pay as little tax as possible. A couple of recent random acts of journalism had reportedly exposed Google and Amazon.com as skirting around the laws by them having “marketing” employees staffed outside their “home base” country – with those marketing people reportedly being described as sales personnel, which would mean those companies would have a “physical presence” in those countries and thus be subject to taxation.
Google has been paying taxes out of Ireland, while Amazon.com claims its hub or operations in Europe is in Luxembourg – two of the countries with the lowest corporate tax rates in the EU.
In the wake of Apple Inc. (NASDAQ:AAPL) CEO Ti Cook testifying before a U.S. Senate committee on taxation rules in the U.S. and why Apple found it better to take out debt to give $100 billion back to shareholders instead of repatriating its foreign cash, the EU has all but scrapped the energy-policy agenda for its summit this week in exchange for a scheduled four-hour discussion about taxation issues and the best way to close loopholes so companies like Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) pay more than the paltry sums they have paid which has resulted in the EU losing out on an estimated $1.3 trillion each year in tax revenues.
Although these smart people have not asked for our opinions, what suggestions would you have for the EU’s taxation woes? How much should Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) pay in taxes to be considered their “fair share”? Let us know your thoughts in the comments section below.