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Apple and Google Strike Back For Unfair Treatment Over Tax Regimes

01 Feb

Apple tax, Apple Europe

The two technology giants claim that they are being unfairly targeted as the public backlash over controversy escalates.

Apple and Google have aggressively responded in a row over the taxation regimes of big tech groups, stating they have been targeted in an unfair manner as public backlashed over the controversy escalates.

Google yesterday defended its $185.36 million settlement with the tax authorities of Britain for the first time in a letter written by it to Financial times, claiming it was acting according to the law of the United Kingdom. Separately, the US consumer electronics manufacturer, Apple, said it should not pay anything over the Brussels investigation in its accused tax agreements in Ireland.

The two organizations have intervened as British Prime Minister ‘David Cameron’ tacked difficult questions about Google’s tax deal in parliament. American business leaders and Silicon Valley giants have stepped up their efforts to lobby in Washington, claiming that European authorities are acting against multinationals in a discriminatory manner.

A group of United States senators recently said the imposition of any fines on organizations amounted to discriminatory taxation. Last week, Google reached an agreement with the British taxation authority to pay $185.6 million in taxes dating to 2005, whereas also agreeing to pay higher taxes in the coming times.

Google, regulatory bodies and ministers have strived to contain the media hype resulted due to the agreement. Analysts have estimated that the smartphone maker could be liable for billions of dollars in taxes, if an investigation conducted by Brussels regarding its tax arrangements in Europe does not support it.

CFO of Apple, Luca Maestri, spoke to FT, “This is a case between the European Commission and Ireland and frankly there is no way to estimate the impact right now, we need to see what the final decision is going to be. My estimate is zero. I mean, if there is a fair outcome of the investigation, it should be zero.”

Her Majesty Revenue & Customs took interviews of customers, corporate executives and other workers as a part of its 6-year investigation into the tax affairs of Mountain View based enterprise.

A pressure group, Tax Justice Network, estimated that Google must pay around $285.17 million in corporate taxes each year, they stated on the declared sales and profit margins in the United Kingdom.

In 2013, the search engine company made a payment of $29.3 million in taxes based on attributed profits earned in UK, compared with its British revenue of $5.6 billion. Multinationals are increasingly pressurized by HRMC using special powers for dealing with aggressive avoidance of taxes.

 

 

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Posted by on February 1, 2016 in Apple Inc, Google, Technology

 

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