The European Union’s commitment to make the U.S. tax system simpler may spell trouble for large multi-national companies. Apple is in trouble and currently facing tough questions before the Senate to explain their tax activities.
Tax evasion has been a prominent problem for decades, but the new will of various governments to curb tax evasion is the result of public uproar against some of the top corporations that evade taxes while the general taxpayer pays their dues, and the effort to increase revenue and improve tax compliance through greater transparency.
President of the European Council, Herman Van Rompuy, said that there is a “strong political will by the leaders, not the European but also on a global level, to go forward in attacking tax fraud and tax evasion.” His words remind us of the aggressive measures the Internal Revenue Service and other government agencies are taking in the U.S. to bring down tax evasion.
Apple, Microsoft and HP are some of the big names whose tax strategies are currently under investigation. Apple is being accused of using loopholes in the tax code to evade taxes legally. Ireland has also come under the fire for helping Apple reduce its tax liability.
With the vulnerability of the current economic climate, there has been public anger against large corporations that do not fulfill their tax duty, the cost of which is transferred to taxpayers. Apple has become the face of that crisis.