The European Commission on Wednesday stepped up its campaign to force big American technology companies to pay more taxes on Wednesday. It ruled that Luxembourg had violated EU rules by allowing the bulk of Amazon's European profits to go untaxed, and it announced it was taking Ireland to court for failing to collect higher taxes from Apple, after Ireland ignored a similar ruling from the EC last year. If the EC wins the battle, Apple could owe ?13 billion ($15 billion), while Amazon could owe an extra ?250 million ($290 million).
The EU's competition commissioner, Margrethe Vestager, says that she's just trying to create a level playing field by preventing big multinational companies from getting sweetheart deals not available to most companies. But critics say Vestager is meddling in the internal tax policy decisions of democratic nations?and some have also insinuated that she has been singling out American multinationals for extra scrutiny.
Small European countries have found they can attract business from big companies by creating business-friendly tax regimes. Technology companies have taken full advantage. Both Apple and Amazon set up convoluted corporate structures that attribute the bulk of their European profits to shell companies carefully designed to minimize tax payments. Vestager wants to stop some of the most egregious tax dodges in this area, but her campaign is generating a lot of controversy.
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