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Gurria: EU Should Call Out Tech Companies on Tax Problem

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Oct. 10 (Bloomberg) -- European Union leaders should tell technology companies that on tax issues, “we have a problem,” said Angel Gurria, head of the Organization for Economic Cooperation and Development.

“What they should say is, let’s have a dialogue which both recognizes the need to be a good fiscal citizen, and to pay your fair share to the citizens that make your business possible, and at the same time, we provide legal certainty that there will be a framework that will allow you to plan ahead without suffering any unwanted consequences,” Gurria told reporters in Washington today.

International technology companies such as Google Inc., Apple Inc. and Yahoo! Inc. need to realize that “listen, you had a good ride,” Gurria said. Such firms now need to play a bigger role in countries where they do business because governments have become more strapped for cash during the global financial crisis and recession, he said.

“The absence of taxes by the multinationals leaves as your captive audience middle classes, small and medium enterprises or companies that are strictly national in their boundaries and those are going to be having a heavier and heavier tax burden because the needs are always there and at the same time, the others don’t pay,” Gurria said. “It is about sharing the burden. It’s not about moving against the multinationals at all.”

EU leaders will meet Oct. 24-25 in Brussels to discuss the digital economy. In Oct. 7 draft guidelines for the summit’s conclusions, leaders “underline the importance for the digital economy of ongoing work to tackle tax avoidance, base erosion and profit shifting” and pledge to revisit the issue when they meet in December.

To contact the reporter on this story: Rebecca Christie in Washington at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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