(Inter)National Nitpickery: Extreme International Penny Pinching

Curious about world news, events or the occasional Australian political blunder? Every edition, we’ll be deconstructing politics and topical events from the outside world, poking the shitty bits with a nice long stick and commenting on its tangy smell. Perhaps we’ll find a nugget of golden wisdom lurking within?

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In Austria, Starbucks pays less tax than a sausage stand.

Now, Austrians love their sausages, no doubt about it, but somehow I doubt that there’s a multi-billion dollar sausage street stall in Vienna.  Similarly, I doubt Austrian sausage stands are paying millions of dollars in tax, no matter how great their Käsekrainer are. Wait, so does this mean Starbucks (and other multinational corporations) pay little to virtually zero tax in Austria? Shock! Horror!

Okay look, as a broke university student I’m admittedly impressed at how good Amazon and the likes are in their penny pinching abilities. However, it is a bit worrying that the Australian local pie shop equivalent pays more tax than some of the most powerful international corporate forces in the world. I love capitalism as much as the next privileged white male, but that level of tax avoidance is taking it a tad far.

The whole multinational corporate tax thing has been in the public spotlight for a while now. Even prior to the Panama Papers, everyone knew that Apple, Amazon and Google were all setting up subsidiaries in Ireland, Cayman Islands and other such ‘tax haven’ countries. Of course, these subsidiaries are often a single offices or call centres, and do little to no work, despite on paper having sales and services routed to them. In fact, tax avoidance is so common now amongst corporations that it may as well be regarded an art form – from the good ol’ inversion trick of buying an offshore foreign company in order to shift corporate headquarters with no effort required, to the cleverly named “Double Irish and Dutch Sandwich” that involves three subsidiaries. Recently, however, the EU got fed up with Apple’s sneaky bullshit, and the European Commision ruled for $13 billion (plus taxes) to be coughed up and paid to Ireland. Naturally, Apple called the move “total political crap”.

This is the latest in a string of retaliations from the European Commision, thanks to a spearheading effort from Margarethe Vestager, the EC Commissioner for Competition, who’s been nicknamed the “Iron Lady of Denmark”. Google, McDonald’s and Starbucks have nowhere to hide from her fine-inducing stare. It’s thanks to the EC’s stellar work that the US and other countries are actually finally considering crossing corporate tax reform off their to-do list. A couple of US senators ironically called the recent Apple ruling a “cheap money grab”, despite plans forming to repatriate several billions from Apple next year.

In Australia however, we can thank our shaky Senate for the Government pulling back from its $2.7 billion tax cut to big businesses and banks – they are, however, still moving forward with small and medium business tax relief legislation. The Liberal Government is still planning on moving ahead with its original election plan at some point, since apparently giving big businesses tax cuts incentivises jobs and growth, or something like that.

But given exactly how much Apple and their ilk pay in taxes, I, for one, would like to see sausage stands get a tax cut one of these days.