World Economy

Austria Says Amazon, Starbucks Pay Less Tax Than Sausage Stalls

Austria Says Amazon, Starbucks  Pay Less Tax Than Sausage StallsAustria Says Amazon, Starbucks  Pay Less Tax Than Sausage Stalls

Amazon and Starbucks pay less tax in Austria than a local sausage stall, the country’s Chancellor Christian Kern has said in a newspaper interview.

“Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” Kern told Der Standard, BBC reported.

“That goes for Starbucks, Amazon and other companies,” he said.

He added that EU countries with low corporate taxes were undermining the structure of the union itself.

“What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” he said.

He praised the European Commission’s recent order that Apple should pay €13 billion ($14.5 billion) more in tax to Ireland.

On Tuesday, the European Commission decided after a long investigation that Apple should pay the €13 billion in extra tax, plus interest, to the Irish government because a long-standing tax deal with the US tech giant amounted to illegal state aid.

Apple and the Irish government have criticized the decision and the US firm has said it is confident it will be overturned on appeal.

Kern, who heads Austria’s Social Democrats and the country’s coalition government, also said Facebook and Google had sales of more than €100 million each in Austria.

“They massively suck up the advertising volume that comes out of the economy but pay neither corporation tax nor advertising duty in Austria,” he added. As well as Apple, the European Commission has launched past or current investigations into the tax arrangements of Fiat, McDonald’s, Starbucks and Amazon.

 Juncker’s Tax Deals

European Union chief Jean-Claude Juncker faces embarrassment over sweetheart tax deals signed by Luxembourg with Amazon and McDonald’s when he was prime minister, Mailonline reported.

The EU Competition Commissioner Margrethe Vestager said she was going after the online retailer and fast-food chain next after slapping Apple with an €13 billion tax bill.

The investigations are awkward for Juncker, the European Commission president. He was prime minister of Luxembourg for 19 years until 2013. McDonald’s is accused of avoiding €1 billion in tax from 2009 to 2013 by routing revenue from across Europe through Luxembourg, where it is claimed it was given a special deal to lower its tax rate.

Amazon faces similar claims that it lowered its tax bill by making sales to European customers through an arm of the company in Luxembourg.

In 2014, the online retailer’s UK business paid $15.82 million in tax on $7.05 billion of sales to British shoppers. McDonald’s and Amazon both deny any wrongdoing.