Austria chancellor Christian Kern claims that multinational corporations such as Amazon.com, Inc. (NASDAQ:AMZN) and Starbucks Corporation (NASDAQ:SBUX) pay less in tax than “sausage stands.”
“Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” stated Chancellor Kern during an interview with the Der Standard newspaper. Kern expressed a lot of concern claiming that the situation is unfair an unacceptable. She did not, however, explain how paying less taxes than sausage stands hurts Austrian consumers of Starbucks or Amazon products, who she claims she is trying to protect in a general sense.
The chancellor called out the companies over the tax matter and criticized them saying there would be more print subsidies if internet companies such as Alphabet Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) if they paid more taxes.
The Chancellor took sides with the EU on the ruling given on Apple Inc. (NASDAQ:AAPL) suggesting that the iPhone maker should pay $14.5 billion in taxes as well as interest to Ireland. This is after the company was found to be carrying out tax evasion measures. Kern also criticized countries that charge lower taxes because they attract multinational firms. “What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” stated Kern in one of his statements.
In other words, she believes all of Europe should levy taxes on an equal level so capital will not flow from one place to another in order to escape it. The chancellor also stated these companies derive a lot of advertising revenue from these countries but they avoid paying advertising duty and corporation tax in countries such as Austria. She did not explain why it is unfair to make money in advertising but not to pay a duty to governments that have nothing to do with advertising.
Despite tax outcries, companies such Alphabet, Facebook and other tech and internet giants claim that they have been adhering to all tax regulations. The EU claims otherwise regarding Apple. The European Union recently finalized its investigation on Apple after three years. The results came out against Apple, which is not surprising considering the EU is an interested party in this case, and the company is now facing one of the biggest fines in history. The situation has raised a lot of concern among companies as the EU promises to crackdown on more corporate tax evaders, thereby causing capital to inevitably flee the area.
Kern stated that Amazon paid significantly lower taxes than the amount of taxes paid by every café located in Vienna. He also stated that the same is true for multinational companies such as Starbucks and many others.