EU Cracks Down On Tech Giants' Tax Avoidance, Again

Wednesday has been busy for the EU's competition chief, Margarethe Vestager, who again put Silicon Valley’s tax affairs in the spotlight.

First, there’s the EU’s tax tussle with Apple and Ireland – the EU Competition Commissioner decided to take Ireland to the European Court of Justice over failure to reclaim €13 billion of back taxes from Apple.

“More than one year after the commission adopted this decision, Ireland has still not recovered the money,” said Vestager. “Member states need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU court for failing to implement our decision.”

Second, we have Luxembourg and Amazon – the Commission ordered Luxembourg to recoup €250 million from Amazon, saying that the US online retailer benefited from an unfair tax deal.

"Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon's profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules. This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others," said the EU Competition Commissioner.

The New York Times gives a very comprehensive and condensed view on the cases, both considered as illegal state aid by the Commission. The article might not be brilliant, but it’s an important read for anybody who wants to stay up-to-date with news on EU’s clampdown on tax avoidance by tech giants. And if you haven't heard of it yet, you should pay attention because Margarethe Vestager definitely means business. For some background information on her and her approach, I recommend articles by the Wired and the Financial Times.