European nations seek more taxes from American firms

Some tax collectors, lawmakers and competitors of Google in Europe say this is unfair.

As governments throughout the region seek to close gaping holes in their budgets, they are taking aim at United States multinational companies, especially internet giants like Google and Amazon, which pay little or no taxes in Europe, despite generating billions of dollars in revenue on the continent.

“Why on earth do you manipulate your accounts so that you get away with not paying corporation tax in the UK?” Margaret Hodge, a member of Parliament, asked representatives of Google, Amazon and Starbucks last week, during a heated committee hearing in London.

In France, tax collectors have gone further.

Amazon says it has received a bill from France for taxes and penalties related to the “allocation of income between foreign jurisdictions” from 2006 through 2010. Other companies, including Google, are also reportedly in the French authorities’ sights.

“Even if the internet is a zone of freedom, it shouldn’t be a lawless zone,” Najat Vallaud-Belkacem, a French government spokeswoman, said. “Fiscal rules should be able to be applied to those activities as well.”

Google, Amazon, Starbucks and other American companies facing tax scrutiny say they are doing nothing wrong. They use complex accounting strategies to exploit national differences across Europe in corporate tax rates, which range from less than 10% to more than 30%, and loopholes that can reduce their effective European tax levies to

... contd.