Merkel Takes on Starbucks in Bashing Over Unfair Tax Practices
Merkel Takes on Starbucks in Bashing Over Unfair Tax
Practices
Chancellor says that Starbucks exploits tax loopholes
‘That’s not right and we have to do something about it’
by Arne Delfs and
Patrick Donahue January 28, 2017, 5:41 AM PST
Chancellor Angela Merkel decried unfair tax advantages
for multinational corporations, singling out U.S. coffee chain Starbucks Corp.
as a tax rogue that exploits global arrangements at the expense of German
chains.
At a meeting of Merkel’s Christian Democratic Union in
her home district on the Baltic Sea coast, the chancellor sounded off against
companies that engage in tax avoidance, hitting a theme that’s been taken up
across the political spectrum. Many companies “have managed to pay taxes
nowhere in the world,” Merkel said, before laying into the Seattle-based coffee
chain.
“Coffee-house operators from Germany have to pay their
taxes, while it’s not at all clear with Starbucks whether they pay taxes
anywhere,” Merkel told CDU supporters in the northern German town of Grimmen on
Saturday. “That’s not right and we have to do something about it.”
Starbucks has been in the cross-hairs of European Union
regulators. The company is appealing a 2015 order by EU watchdogs to repay 30
million euros ($32 million) in taxes. EU Competition Commissioner Margrethe
Vestager has prioritized the fight against special tax treatment for certain
companies, arguing that it amounts to illegal state aid. A call and email to
Starbucks in Germany were not immediately returned on Saturday.
Starbucks and a Fiat Chrysler Automobiles NV unit have
been ordered to pay back taxes they allegedly avoided thanks to agreements with
the Netherlands and Luxembourg.
Merkel and her finance minister, Wolfgang Schaeuble, have
insisted on greater tax harmonization across the EU to stop tax avoidance
schemes. As she seeks a fourth term as German leader this year, the chancellor
has made clear she’ll use the issue on the campaign trail.
“Big international companies have managed to pay taxes
nowhere in the world,” Merkel said in Grimmen. “That can’t be fair. I know
about the anger here and it’s completely understandable.”
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