Letter to the Financial Times: after Apple, McDonald’s must pay what it owes in taxes

(1st September 2016) A letter from Jan Willem Goudriaan, General Secretary of the European Public Service Union, was published today in the British newspaper, the Financial Times. It reads:

“Dear Sir,

Apple’s response to the European Commission’s decision on its tax arrangements in Ireland reads a little like blackmail. In a statement published on its website, it warns that the order to pay up to €13 billion in dodged taxes may harm jobs and investment in Europe. Multinationals should not be able to threaten countries for having to pay their fair share of taxes.

McDonald’s is also under investigation by the European Commission for its tax arrangements with Luxembourg. When challenged in European Parliamentary hearings on these deals, the fast food giant evoked a similar reasoning to dodge the real question: why does it appear not to be paying taxes on its European profits? This is particularly hypocritical in McDonald’s case. McDonald’s pays low wages, then expects ordinary taxpayers—not least small businesses—to pick up the bill, in the form of welfare payments or public money to subsidise low-paying jobs.

Commissioner Vestager’s announcement should be commended. I expect a similar decision on McDonald’s in the near future.”

Jan Willem Goudriaan added:

“It is worrying to hear some commentators draw the conclusion that this ruling makes the case for lower, or even zero, corporate tax rates. The truth is that corporate tax rates in Europe have fallen by roughly 12 percentage points since 1995, from 35% to 23%. Multinationals take full advantage of the skilled workforce, infrastructure and services that taxes pay for. They should pay a fair contribution towards them.

“EPSU, along with the European Trade Union Confederation, has repeatedly called for a common consolidate corporate tax base (CCCTB) for all multinationals in Europe, with a minimum corporate tax rate of 25%. This would begin to redress the race to the bottom on tax rates between member states and prevent much of the profit shifting between jurisdictions that companies use to dodge taxes.

“This must be accompanied by public country-by-country reporting on corporate tax, where multinationals would have to publish where how much business they do where and what tax they pay. There is currently a proposal on the table at EU level, but it is too weak as it will only include some countries. Multinationals should report for all countries to start to shed some light on the murky places where some companies stash their cash.”

For more information or further comment contact Patrick Orr [email protected]