CEOs Panic: Europe Rules Corporate Tax Loopholes Are "Illegal"
The European Commission’s ruling is the result of years of sustained activism from anti-austerity groups like UK Uncut.
CEOs Panic: Europe Rules Corporate Tax Loopholes Are "Illegal"
By Steven Johnson / usuncut.com
Oct 22, 2015

Thanks to a new ruling from the European Commission, Starbucks and Fiat are now finally being forced to pay their fair share of taxes, as tax loopholes benefiting multinational corporations with accounts in European countries known for their tax haven status have been ruled illegal.

After 5 years of direct action and organizing from the grassroots, anti-austerity movement UK Uncut, which ties corporate tax avoidance to public service cuts, the movement can claim another major victory — particularly in regards to Starbucks, as UK Uncut has targeted the company for years due to its reputation as a notorious corporate tax avoider.

starbucksimage

On Wednesday, the commission ruled that that those companies must now pay back the $34 million USD they each avoided thanks to tax loopholes in Luxembourg and the Netherlands. And from the looks of it, more retribution is in the cards.

“The Commission continues to pursue its inquiry into tax rulings practices in all EU Member States,” the commission statement read. “Its existing formal investigations into tax rulings in Belgium, Ireland and Luxembourg are ongoing.”

fiatimage

For years, multinational corporations have been finding and exploiting tax loopholes in order to dodge paying the full amount of taxes owed, and in most cases they were able to successfully dodge paying any taxes altogether. Much of this process involves utilizing European tax laws to book profits made in the US in overseas bank accounts. The statement issued by the commission explained the process by which these two companies were able to exploit tax laws:

The two tax rulings under investigation endorsed artificial and complex methods to establish taxable profits for the companies. They do not reflect economic reality. This is done, in particular, by setting prices for goods and services sold between companies of the Fiat and Starbucks groups (so-called “transfer prices”) that do not correspond to market conditions. As a result, most of the profits of Starbucks’ coffee roasting company are shifted abroad, where they are also not taxed, and Fiat’s financing company only paid taxes on underestimated profits.

“Tax rulings that artificially reduce a company’s tax burden are not in line with EU state aid rules. They are illegal,” said Margrethe Vestager, the EU Competition Commissioner. She went on to say that today’s decision should send a message to both member state governments and companies alike that all companies big or small, multinational or not, should pay their fair share in taxes.

While the investigation into corporate exploitation of tax loopholes is limited to Europe for now, it may soon impact the tax avoidance habits of major American corporations. The Commission’s statement mentioned ongoing investigations into Apple’s habit of booking profits made from American economic activity in Ireland — a known tax haven — as well as Amazon’s use of Luxembourg’s tax laws to avoid paying taxes on revenue made in the United States.


Steven Johnson is a Georgia-based journalist for US Uncut. He can be reached via email at stevejlive@gmail.com.

3.8 ·
3
Trending Today
Globalization Makes No Sense
Chris Agnos · 27,877 views today · When I lived in San Francisco, I often would marvel at the movement of goods through the ports across the bay in Oakland. Full container ships would enter the bay one after...
Proof of Evolution That You Can Find on Your Body
4 min · 13,595 views today · Vestigial structures are evolution's leftovers — body parts that, through inheritance, have outlived the context in which they arose. Some of the most delightful reminders of...
The Most Astounding Fact about the Universe
3 min · 4,949 views today · This is Neil Degrasse Tyson's response when asked to describe the most astounding fact about the universe. Background music is the cinematic orchestra - To build a home.
Stunning Small Homes Form Part of a Communal Compound for Best Friends
Lighter Side · 4,232 views today · If you’re lucky enough to have longtime friends even as an adult, then you know probably already know how much it means to be able to spend time together. Maybe you even have a...
How Norway Avoided Becoming a Fascist State
George Lakey · 3,350 views today · Instead of falling to the Nazi party, Norway broke through to a social democracy. Their history shows us polarization is nothing to despair over.
To Change Everything, Start Everywhere
8 min · 3,028 views today · To Change Everything, Start Everywhere! The case for complete self-determination—a guide for the furious, the curious, and the pure of heart. To Change Everything: An...
The Foiled Bomb Plot in Kansas That Didn't Make Trump's Terror List
5 min · 2,879 views today · When a plot by a pro-white militia to bomb a Somali mosque in Kansas was foiled by the FBI last October, the aborted conspiracy received little national coverage - nor did it...
The London Anarchist Group Squatting Mansions to Fight Homelessness
6 min · 2,645 views today · London squatting activists ANAL (Autonomous Nation of Anarchist Libertarians) are squatting empty multi-million pound buildings and opening them up to the homeless.
Where the Term "Redneck" Came From
15 min · 2,632 views today · If you don't know this story, you'll never look at the word the same again.  This is just a window into the sometimes shocking, subversive and untold history of the United...
Without Saying a Word This 6 Minute Clip From Samsara Will Make You Speechless
6 min · 2,380 views today · Can you put this video into words? It's a clip from the phenomenal documentary Samsara, directed by Ron Fricke, who also made Baraka.  If you're interested in watching...
Transition From Caterpillar to Butterfly as Analogy for Social Change
4 min · 2,327 views today · An exceprt from Crossroads: Labor Pains of a New Worldview in which Dr. Bruce Lipton talks about the fractal nature of reality and compares the current global awakening and the...
From Sanctuary City to Liberated City
Frank Lara · 2,082 views today · In just one week, with several strokes of a pen, Trump unleashed upon the working class in the U.S. an attack not seen in decades. From his attack on the flawed Affordable Care...
The Fire Within
Words by Sophie Scholl - Illustrations by Gavin Aung Than · 1,806 views today · Sophie Scholl (1921-1943) was a German activist who is famous for speaking out against the Nazi regime. Scholl was a member of a protest group called The White Rose, which...
Michael Moore Wants to Help You Find Your Next Anti-Trump Protest
Sarah Ruiz-Grossman · 1,686 views today · The Resistance Calendar lists upcoming rallies across the country.
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 1,539 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
How a Lack of Touch Is Destroying Men
Mark Green · 1,108 views today · Why Men Need More Platonic Touch in their Lives
10 Words Every Girl Should Learn
Soraya Chemaly · 1,046 views today · "Stop interrupting me."  "I just said that." "No explanation needed." In fifth grade, I won the school courtesy prize. In other words, I won an award for being polite. My...
Redneck Revolt Presents: A Message to the Patriot Movement
6 min · 969 views today · Over the past few weeks, Redneck Revolt has been communicating with a former member of a III% Patriot Militia based out of Ohio. Peter made contact with our organization after...
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 805 views today · This is easily the best comic strip ever made.  Pabl
Compassion, the Antidote
Martin Doblmeier · 802 views today · Thich Nhat Hanh has published nearly 100 books and is one of the best-known teachers of Zen Buddhism in the world today. In the early 1960s his practice of what he termed...
Load More
What's Next
Like us on Facebook?
CEOs Panic: Europe Rules Corporate Tax Loopholes Are "Illegal"