EU is close to deal to tax tech giants

Nov

12

2018

The French finance minister Le Maire said in a radio interview that the European Union has almost reached an agreement on the plan to tax large tech companies, despite resistance from some member states.

Reuters writes that Le Maire expressed the confidence that France, together with Germany, could get other EU member states to come up with a plan. Broadly speaking, the two countries agree, although according to the news agency Germany came up with points of attention last week that it would like to see changed. France wants agreement in December within the EU.

In March of this year, the European Commission announced that the plan to charge large tech companies for their digital activities is expected to generate 5 billion euros a year. That is based on a rate of three percent. The tax focuses on, among other things, income from the sale of advertising space on the internet, from the sale of data generated by users and from ‘activities through which users can come into contact with each other or sell goods and services to each other’.

Companies will only be taxed if they have an annual worldwide turnover of at least 750 million euros and European income is at least 50 million euros on an annual basis. In addition, the turnover in an EU Member State must be at least 7 million euros and the number of users must be at least 100,000 before the relevant Member State enters the company in the framework of these new laws.

According to the European Commission, the activities that have to be taxed are difficult to overcome with existing tax rules, as a result of which large tech companies pay relatively less tax than companies in traditional sectors. The package of measures is temporary and applies until there is a larger reform of the European corporate tax.

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