Tuesday

19th Mar 2024

EU big four push to tax internet giants

  • “We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries,” the ministers said (Photo: Derzsi Elekes Andor)

The eurozone's four main countries are pushing to tax internet giants on their turnover rather than on their profits, in an effort to prevent them from taking advantage of low tax rates in some member states.

In a letter to the Estonian EU presidency and the European Commission, the finance ministers of France, Germany, Italy and Spain ask the EU executive to design an "equalisation tax" on turnover, so internet companies can pay tax where they make money rather than where they registered.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

At the moment, companies such as Google, Apple, Facebook and Amazon - the so-called Gafa - can pay minimal taxes in Europe thanks to subsidiaries in low tax rate countries like Ireland.

Their profits are reported where the subsidiary is, even if revenues are generated in other countries.

Earlier this year, French judges said that Google was not required to pay over €1 billion in taxes on revenues made through its AdWords service, because it has no "permanent establishment" in France.

"We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries," the ministers say in their letter.

They insist that the issue is a question of "economic efficiency," as well as justice and sovereignty.

France's Bruno Le Maire, Germany's Wolfgang Schaeuble, Italy's Pier-Carlo Padoan and Spain's Luis de Guindos will present their proposal at an informal meeting of finance ministers in Tallinn later this week.

The idea was pushed by Lemaire over summer, with Germany reluctant to follow. Schaeuble eventually joined his French colleague and they were followed by Padoan and de Guindos.

Their letter follows an Estonian proposal last week to tax internet companies in countries where they make profits, not only where they are registered.

The proposal would take into account their digital presence rather than physical presence in countries.

The discussions come ahead of a digital summit in Tallinn on 29 September, where EU leaders will discuss how the digital sector can boost the EU's economy in the long term.

Questions of innovation, but also cybersecurity, e-governance and taxation will be on the table.

Trust is 'gold' in digital age

Trust is perhaps the most important resource and the key to building successes, but new Nordic research indicates that challenges may lie ahead in the digital age.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

EU takes aim at UK tax perks

Commission to probe whether UK tax perks for multinationals worth billions of euros amounted to illegal state aid.

Latest News

  1. Borrell: 'Israel provoking famine', urges more aid access
  2. Europol: Israel-Gaza galvanising Jihadist recruitment in Europe
  3. EU to agree Israeli-settler blacklist, Borrell says
  4. EU ministers keen to use Russian profits for Ukraine ammo
  5. Call to change EIB defence spending rules hits scepticism
  6. Potential legal avenues to prosecute Navalny's killers
  7. EU summit, Gaza, Ukraine, reforms in focus this WEEK
  8. The present and future dystopia of political micro-targeting ads

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us