Business News in Brief: Denmark rejects plan to tax IT giants harder
At an informal meeting between finance ministers in Estonia at the weekend, the Danish minister of finance, Kristian Jensen, refused to support a French proposal for a new kind of tax on global IT giants such as Google and Facebook.
The minister is afraid that such a tax would lead digital companies to look elsewhere when it came to setting up their businesses, reports Politiken. “I’m always sceptical about new taxes and I think that Europe is taxed hard enough as it is,” said Jensen to Bloomberg after the meeting.
Up to now, IT firms have been able to pay extremely low rates of tax by moving their profits to EU member states where the tax system is favourable, especially Ireland. Using this method, in 2015 Facebook only paid 0.03 percent tax on its profits in the EU – compared to 28 percent on profits made in the rest of the world. Google likewise paid 0.82 percent tax on its EU profits compared to 6 percent on those made elsewhere.
In 2015, Google Denmark paid around 3 million kroner in tax – even though they are estimated to have a turnover worth billions. To achieve this, Google invoices most of its orders through its European headquarters in Ireland.
The French proposal would introduce a tax on turnover instead of profit. Launched last weekend, it already has the support of Germany, Italy and Spain and a further 6 countries – Austria, Bulgaria, Greece, Portugal, Romania and Slovenia are now also backing it.
In a joint communique after the meeting it was stated that “We ought not to accept that these companies do business in Europe and get away with paying minute amounts of tax to our exchequers.”
The Danish finance minister has been called in to face a parliamentary committee on this issue by SF’s finance spokesperson Lisbeth Bech Poulsen. “We have to put a stop to this race to the bottom, where companies can shop around between EU countries in search of low rates of taxation,” she said.
“There ought to be greater co-operation between EU countries on taxation to get this stopped. The Danish position is anti-social and we end up in bad company with countries like Luxembourg and Malta.”
One or two European countries have been able to reach agreement with the IT giants, but so far, it has not been possible to find an EU-wide solution to the problem.
New British-born boss for Velux
The CEO of the Danish window manufacturer, Velux, is stepping down at the end of this year after 17 years in the job. Jørgen Tang-Jensen started back in 1981 as product head for accessories such as blinds and roller shutters. Since 2001 he has been CEO of the company. His successor will be David Briggs, a 52-year-old Englishman who has been with Velux since 1991. “I’m deeply honoured and humble at being given the chance to lead this fantastic company. I feel a great responsibility but at the same time, am very enthusiastic and I’m convinced that in future, we can achieve great things,” said Briggs.
Brewery giant sacks CEO with immediate effect
The Danish brewery giant, Royal Unibrew, has fired its CEO, Jesper B Jørgensen after only five months in the job. Although Jørgensen has delivered good financial results since his appointment in April, things have not gone smoothly within the company. “Unfortunately, Jesper B Jørgensen’s style of leadership didn’t fit into the Royal Unibrew culture, said Kåre Schultz, a member of the board of directors, in an announcement to the stock exchange. Jørgensen’s successor is Hans Savonjie, a Dutchman with more than 35 years of managerial experience, much of it in the drinks industry.
Danish homeware chain expanding into UK and Ireland
The Danish retail chain Søstrene Grene that specialises in homeware products is to open a second UK branch in Chester city centre next month, reports the Chester Chronicle. It is only a year since the chain opened its first British store in Nottingham. Søstrene Grene now has 157 branches and has already been successful in Spain, France, the Netherlands, Norway and Sweden. Earlier in September, a sixth shop was opened in Ireland in Limerick, reports Limerick Leader. CEO Mikkel Grene commented that “The Irish customers seem to like our Scandinavian design profile and the atmosphere in the stores. I am positive Limerick will be a great new addition to our collection of stores.”