Friday

16th Nov 2018

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

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join 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.

Focus

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 time to ponder tech giant tax

The EU commission published a paper that outlined several options on how to increase tax income from internet companies' activities, but fell short of proposing legislation.

News in Brief

  1. UK's May defends Brexit deal to MPs, after ministers resign
  2. Brexit MP calls for 'no confidence' vote on May
  3. Denmark blocks Tanzania aid over homophobic crackdown
  4. Second UK cabinet minister resigns over Brexit deal
  5. UK Brexit secretary quits morning after deal agreed
  6. Romanian MPs call for national 'Magnitsky Act'
  7. Tusk: Brexit summit on Sunday 25 November
  8. Full text of Brexit withdrawal agreement published

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. No-confidence calls against May put Brexit deal in doubt
  2. Key points of the Brexit deal (if it ever comes into effect)
  3. Romania heaps scorn on 'revolting' EU criticism
  4. US steps in to clean up Cyprus
  5. 'Decisive progress' on Brexit as British cabinet backs deal
  6. Asylum for Macedonia's ex-PM puts Orban on spot
  7. How the 'EU's Bank' fails to raise the bar on accountability
  8. Knives out on all sides for draft Brexit deal

Join EUobserver

Support quality EU news

Join us