Sunday

28th Nov 2021

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

Become an expert on Europe

Get 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.

News in Brief

  1. Covid variant: EU to block travel from southern Africa
  2. France and UK seek EU help on Channel migrants
  3. New Swedish PM who resigned after 7 hours gets second chance
  4. Belgium to decide on Friday on Covid measures
  5. UK rings alarm on new Covid strain in South Africa
  6. Turkish police use tear gas at women's rights march
  7. Poland calls for more Nato troops
  8. Ex-Navalny aide leaves Russia

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. Belgium goes into three-week 'lockdown light'
  2. MEPs list crimes of 'Kremlin proxy' mercenaries
  3. EU to open up 'black box' of political ads
  4. Can the ECB solve climate change and inflation on its own?
  5. EU set to limit vaccine certificate to nine months
  6. Surprise coalition in Romania without former Renew's Ciolos
  7. This 'Black Friday' is a turning point in corporate accountability
  8. West struggling to show strength on Ukraine

Join EUobserver

Support quality EU news

Join us