|Eric Schmidt, Google executive chairman, (c) speaking at the Google UK Big Tent event, Wednesday, May 22, 2013 |
Big companies operating in
the European Union (EU), beginning with banks, will be forced to provide breakdowns of tax paid
country-by-country according to regulations being drafted by Michel
Barnier, European commissioner for the internal market and financial services.
Barnier said in a speech in Amsterdam Thursday that rules which will compel
banks to report their profits, taxes and subsidies by country from 2015 could be
bought forward and will also now be extended to cover other companies.
The plan is a response to the international controversy about companies such
as Apple, Amazon, Google, Microsoft, Facebook and Starbucks, using countries
such as the Netherlands, Ireland and Luxembourg to avoid paying massive amounts
Tim Cook, Apple's chief, was grilled about his company's use of Ireland as a
tax haven by a US Senate panel in Washington DC on Tuesday. Meanwhile, Eric
Schmidt, Google executive chairman, was back in the UK for a second straight week, to be
hassled about his firm's massive tax avoidance, again using Ireland as a tax haven to
route funds tax-free to Bermuda - - a tax haven with arching palms shading sandy
On Wednesday at the Google Big Tent event in the UK,
Ed Miliband, Labour leader, used Google's original "letter
from the founders"
to argue that its tax structure - - "close" sales in Ireland, transfer money to the
Netherlands, and then ship even more money to Bermuda, was short-term thinking, something that Larry Page and
Sergey Brin had said they wouldn't do.
Charles Arthur of The Guardian
writes: "A week or so ago, Google's chief executive, Larry Page, caused
ripples when he suggested at a public event that laws older than 50 years or so
shouldn't apply to Internet companies, and that it might be fun to have an
island where Google could dabble in new ideas without all the silly meddling of
governments. (That's only a slight paraphrase.) The only way he could have
seemed more like a Bond villain would be if he had been stroking a cat while
Google must be surprised at the pasting its
reputation is getting.
Also on Wednesday, at the EU summit in Brussels,
Austria and Luxembourg joined in calls for the increased sharing of
banking information. Until recently, the two countries have been opposed to ending banking
secrecy in their respective countries, blocking such reforms in previous
meetings in the fear that it would harm their attractiveness as banking
On Wednesday Austria and Luxembourg agreed to the plan after being
given until the end of the year, allowing them more time for negotiations on
ending banking secrecy in non-EU countries like Switzerland, Monaco and
"At a time of social pressure and social tension, fighting [tax evasion and tax
fraud] is a matter of fairness and a matter of credibility," Herman Van Rompuy,
EU council president, said.
"There is a momentum not comparable with other moments in the past because we
are in an economic crisis.