The Strategist

The European Parliament Fell to Thinking About Tax Transactions of Disney and IKEA

11/10/2015 - 14:24

A number of international companies, including IKEA and Disney, was summoned to a hearing of the tax committee of the European Parliament on issue of tax breaks given to companies in Europe.

European Parliament/Flickr
European Parliament/Flickr
The committee’s meeting should also be attended by representatives of Barclays, McDonald's, Coca-Cola, Anheuser-Busch InBev, HSBC and Philip Morris. Invitations were also sent to Facebook, Amazon, Fiat and Wal-Mart Stores.

The secretariat of the committee noted that Wal-Mart Stores refused to participate in the meeting. The hearings are scheduled for November 16th.

In late October, the European Commission decided that the tax incentives, granted to Fiat in Luxembourg and Starbucks in the Netherlands, are illegal. European regulators demanded each of the companies to pay taxes in amount of € 20-30 million.

It is expected that by the end of this year, the European Commission will have decided on a similar tax cases, ongoing against Amazon and Apple, reports Reuters. It is referred to Apple in Ireland, and Amazon in Luxembourg.

Many international companies reduce their tax costs, registering a profit in countries with lower corporate taxes. In early October, it was reported that major US corporations, included in the Fortune 500, are keeping more than $ 2.1 trillion of accumulated profits in offshores to optimize the tax regime.

Such a conclusion was given by experts of two non-profit groups - a center of fair taxation (Citizens for Tax Justice) and US Public Interest Research Group Education Fund, having analyzed the companies’ documentation, filed with the Securities and Exchange Commission. Their report is published on the website of “Citizens for Tax Justice”.

The report’s authors pointed out that if corporation returned their profits to the United States, they would have to pay about $ 620 billion in taxes into the treasury. Now, however, about three-quarters of the participants in the Fortune 500 have subsidiaries in such "tax havens", as Bermuda, Ireland, Luxembourg and the Netherlands. At least 358 companies in the list have a total of about 7.6 thousand subsidiaries in offshore zones.

As the authors of the report note, Apple is holding $ 181.4 billion of profits in their foreign representatives - more than any other American companies. If the iPhone maker repatriated funds from the three countries with lower taxes, it must have oved $ 59.2 billion of taxes to the government.

For comparison, General Electric posted $ 119 billion of profits in 18 "tax havens", Microsoft holds $ 108.3 billion in five countries with low taxes. In the meantime, 30 corporations account for $ 1.4 trillion of the total volume placed in offshores.