Multinational corporations such as Starbucks and Google pay less tax in Austria than one of the country’s famous coffee houses or sausage stands yet rake in hundreds of millions from advertising in the small Alpine nation, Austrian chancellor Christian Kern said.
The center-left politician quoted Austrian activist and author Max Schrems, who said Amazon only paid €1,400 ($1,562) in corporate taxes in 2014 during an interview with Der Standard. He also bemoaned outdated Austrian legislation that uses fees on advertisements to fund the country’s independent media but exempts online ads.
“Every Vienna café, every sausage stand pays more taxes in Austria than a global company. That’s true for Starbucks, Amazon and other companies,” Kern was quoted by the paper.
The chancellor praised the European Commission for this week demanding €13 billion in back taxes from iPhone giant Apple and criticized fellow EU members that offer tax breaks to foreign companies. Brussels ruled that Ireland had improperly granted tax breaks to the computer company, putting the rest of the European Union at a disadvantage.
Ireland’s cabinet agreed Friday to appeal the ruling alongside Apple after Apple CEO Tim Cook labelled the ruling “total political crap.”
“What Ireland, the Netherlands, Luxembourg or Malta are doing lacks solidarity with the rest of the European economy,” Kern said.
The politician said Google reaps €200 million in sales in Austria, while Facebook makes as much as €120 million with little given back to the country or its media. He indicated that the companies also generate very little in personal income tax since Google only employs about a dozen people in Austria, and Facebook even fewer.
The politician said he was considering changes to Austrian media financing laws that require advertisers to pay a 5% fee for advertisements. The fee is used to finance the country’s media but isn’t collected on online ads.
Many European countries collect fees from residents to finance broadcasters, such as the British Broadcasting Corporation. Proponents say the fees ensure national media can remain independent watchdogs. Critics say media can finance itself through advertisements.
“The production model and the financing model have changed drastically with digitalization. If you’re interested in a broad range of opinions and media, then we’ll have to collect it differently. And we’re prepared to,” Kern said.