Georges Schmit, Executive Director, Luxembourg Trade and Investment Office, has penned the following letter to The New Yellow… er, York Times regarding their most recent poorly-sourced Apple hit-piece:
“How Apple Sidesteps Millions in Taxes” (“The iEconomy Series,” front page, April 29) suggests that Luxembourg-based iTunes S.à.r.l. is part of a grand scheme run by Apple to deprive the United States and European governments of billions of income tax dollars or euros. You assert that Luxembourg “has promised to tax the payments collected by Apple and numerous other tech corporations at low rates if they route transactions through Luxembourg.”
In the European Union, every iTunes customer, or customer of any other Luxembourg-based business to consumer e-service provider, pays value-added tax (VAT) — a consumption tax similar to the United States sales tax — at the same, lowest possible rate. This is not the result of these e-service providers’ intent to cheat the taxman. Rather, it is the consequence of a combination of these factors:
European indirect tax law applicable to cross-border business-to-consumer transactions in e-services.
A well-functioning E.U. internal market, which allows for cross-border trade of all e-services from a single location to all other 26 national markets.
The lowest tax rate in the applicable 15 to 25 percent range for standard VAT rates in the 27 European Union member states. So, iTunes S.à.r.l. collects 15 eurocents for every euro spent on iTunes services in VAT from each and every customer, wherever he or she is in the European Union.
Luxembourg and iTunes S.à.r.l. simply apply prevailing E.U. tax law in a well-functioning Internet-based E.U. single market.
Source: The New York Times
MacDailyNews Take: If The New York Times was honest, their front page would be completely covered in egg.
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