Google, Apple, Inter-IKEA Group and McDonald’s said that they would be thankful for more clarity about their tax liabilities in the EU but they are concerned about the administrative compliance costs and they are unwilling to see tax data being made public. Last week, the representatives of the companies attended a public meeting held by the Parliament’s Special Committee on Tax Rulings II to share their views on the coming proposed legislation on corporate tax, especially on the proposed directive against base erosion and profit sharing.
MEPs also specifically asked the companies to share their views on the proposed requirement for country-by-country reporting of profits, taxes and subsidies and whether such information should be made public. However, the company-specific structures, such as Apple’s tax arrangement in Ireland, McDonald’s franchises, Google’s “Bermuda” structure and IKEA’s “royalties” were also on the agenda. During the meeting, a number of MEPs also criticized Google for paying too little tax throughout the block and suggested that the company was “ethically off track” due to its UK revenue service (HMRC) whereby the US tech giant pays £130m in back taxes.
Google’s Head of Economic Policy, Adam Cohen, said that HMRS had looked into its transfer pricing arrangements and concluded that some benchmarks needed to be adjusted. “That is normal for multinational companies”, he underlined, adding that Google pays a global effective tax rate of 19 percent and that the EU’s overall rate is around 20 percent. Apple, being the largest taxpayer in the world, last year paid 1.2 billion dollars in taxes worldwide, which is an effective tax rate of more than 26 percent. However, the company is not willing to disclose its EU and Irish tax payments. “Those are confidential. When country-by-country reporting will become mandatory, we will of course follow,” Apple commented.