Google Inc. and Facebook Inc. were among U.S. companies facing questions Monday from European Union lawmakers about their tax-reducing techniques, a month after regional antitrust regulators raised the stakes by ordering Starbucks Corp. and a Fiat Chrysler Automobiles NV unit to repay millions of euros in back taxes.
The queries about the “Dutch Sandwich” and the “Double Irish” — tax arrangements that allow companies to declare income in lower-tax areas — came as the European Commission weighs its next decisions on fiscal pacts Amazon.com Inc. arranged with Luxembourg and Apple Inc. with Ireland. Eleven companies, including Amazon, faced questioning from the parliament’s special tax committee in Brussels.
“We make use of tax incentives and tax structures that are well known, widely accessible and are employed by virtually all multinational companies,” Google’s Nicklas Lundblad, senior director, public policy and government relations, told the parliamentary committee.
Elected officials have scrutinized the tax strategies of Google, Apple, Amazon, Starbucks, Microsoft Corp. and others, which have used the “Double Irish” and “Dutch Sandwich” to move foreign profits through Ireland and the Netherlands to Bermuda to avoid U.S. income taxes.
Such structures have “no impact on the amount of tax we pay across various European Union countries,” Lundblad said. “The entire Bermuda structure doesn’t erase any tax liability, it defers only U.S. tax.”
Facebook, which has its European base in Ireland, also has operations in the Netherlands in the form of a commercial office, and a legal entity in Luxembourg, said Delphine Reyre, the company’s director of public policy, southern Europe.
“There is no ‘Dutch Sandwich’ in this,” she told the lawmakers. She said has “no preferential fiscal tax treatment” in Luxembourg.
An earlier hearing by the committee was scuttled when nearly all the corporate invitees declined to attend.
“Unfortunately we were unable to accept previous invitations to appear in respect of tax rulings, due to the fact that we’re part of an ongoing state aid investigation,” said Monique Meche, vice president of global public policy at Amazon. “That investigation remains open, and that’s why our comments, we’re limiting them to tax policy.”
Fiat, which declined the lawmakers’ invitation, and Starbucks last month were told to repay tens of millions of euros in back taxes in the first decisions from EU antitrust regulators on fiscal deals that allowed companies to avoid taxes. After facing criticism by British lawmakers and activist groups, Starbucks last year announced it would move its European base to London from Amsterdam and increase the amount of tax it pays in the U.K.
Google and Amazon were also targeted in U.K. Parliament hearings in late 2012 to 2013 on corporate tax dodging and tactics used by information-technology companies and others. The U.S. Senate has also looked into Apple Inc.’s offshore tax policies. The companies all say they’ve complied with international tax laws.
The European Parliament’s probe, which is separate from the regulatory inquiry by the European Commission, started in February, after documents leaked by a group of investigative journalists showed that Luxembourg alone struck hundreds of secret fiscal deals known as tax rulings with companies from around the world, including PepsiCo Inc. and The Walt Disney Co.
Disney, Coca-Cola Co., and Anheuser-Busch InBev NV, HSBC Holdings Plc, Ikea Group and Philip Morris International Inc. also faced questions Monday, with Wal-Mart Stores Inc. declining to appear.
Interswitch is the Most Valuable African Startup
Interswitch, the leading payment processing company headquartered in Lagos, Nigeria, is Africa’s most valuable start-up at a US$ 1 billion valuation.
Founded in 2002, Interswitch uses switching infrastructure to connect different banks in Nigeria and powered banks’ ATM cards. Presently, the company has over 11,000 ATMs on its network.
In 2010, Helios Investment Partners bought two-thirds of the company and in the following year, Interswitch bought a 60 percent stake in Bankom in Uganda.
Interswitch owns Verve, Nigeria’s most used payment card, and accounted for 18 million of 25 million cards in circulation in Nigeria. The company also owns Quickteller and recently purchased VANSO, a mobile-focused technology provider to banks.
Like Interswitch, Stripe, the company that acquired Nigeria’s Paystack for over US$200 million, is the most valuable startup in the USA at over US$70 billion valuation.
Klarna, Nubank, Paytm and Grab leads in Europe, Latin America, India and Southeast Asia with valuations of US$10.65 billion, US$10 billion, US$16 billion and US$14 billion, respectively.
E-commerce Black Friday Sales Estimated to Surge by 40% to 10.2 Billion
The 2020 holiday shopping season will be unique, as the pandemic shifted consumer behavior from retail stores to online shopping. In response, many retailers moved their services online to not miss out on this year’s profits. Atlas VPN team decided to look into how e-commerce sales are set to perform in the upcoming long weekend.
Researchers predict that the US e-commerce revenue will exceed last year’s earnings by 49.5% on Thanksgiving day, totaling $6.18 billion in revenue. Black Friday is calculated to reach $10.2 billion in sales, exceeding last years numbers by 39.4%
Rachel Welch, COO of Atlas VPN, shares her tips on how to stay safe when shopping online during the holiday season:
“Watch out for too-good-to-be-true deals from unknown sellers, as cybercriminals will also expect to turn a profit during the holiday season, even though they are not selling anything, except maybe a bag full of disappointment.”
Finally, analysis shows that on the last day of the long and full of special offers Thanksgiving weekend, consumers will go all out to bring record sales for e-commerce businesses, adding up to $12.89 billion.
To look at these five days from a wider perspective, e-commerce companies can expect to earn around 39.72% more than they did last year.
Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales
Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. Sales across Alibaba’s platforms during the event totaled $74.1 billion, up from $38 billion in 2019.
According to the research data analyzed and published by Stock Apps, within the first 30 minutes of the event, the gross merchandise volume (GMV) surpassed 2019’s full-event sales, reaching $40.87 billion.
Moreover, instead of live events, Alibaba had 400 company executives and 30 celebrities hosting livestreams. Based on a study by Coresight, the Chinese livestream market is set to rack in sales worth $125 billion in 2020, compared to $63 billion in 2019. The US livestream market is a small fraction of that, valued at $5 billion.
China’s Tech Heavyweights Lose $280 Billion in Market Cap
Alibaba Singles Day 2020 dwarfed other major shopping holidays as has been the trend in previous years.
According to Practical eCommerce, Amazon Prime Day 2020 sales totaled $10.4 billion up from $7.16 billion in 2019. Cyber Monday sales in the US amounted to $7.9 billion in 2020 according to Statista. Black Friday and Thanksgiving added $9.7 billion to the figure to make $17.6 billion for the weekend.
Similarly, in 2018, Singles Day sold $30.8 billion while Prime Day sold $4.19 billion and Thanksgiving weekend got $14.2 billion.
However, the 2020 Singles Day event came in the wake of Ant Group’s suspension of a $37 billion listing. The suspension resulted in a $76 billion drop in Alibaba’s market cap, as the tech giant owns a two-thirds stake in Ant Group. Moreover, China’s regulators released anti-trust draft rules prior to the event, aimed at controlling monopolistic behavior.
Following the release, Alibaba shares plunged by 9.8%, as JD.com shed off 9.2%. Tencent similarly saw a 7.39% drop and Xiaomi fell by 8.18%. For the five companies, there was a combined loss of $280 billion in market capitalization.
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