EU to overhaul tax rules for tech groups
Tax-avoidance strategies used by Gafa — Google, Amazon, Facebook and Apple — deprive EU governments of billions of euros, say critics
Paris — The EU will soon unveil a plan for taxing leading internet companies such as Amazon and Facebook by imposing a levy of 2%-6% on revenues in every country where they operate, French finance minister Bruno le Maire said on Sunday.
"The range will be from 2%-6%, but closer to two than to six," Le Maire said.
The European Commission has said that at the end of March it will present an overhaul of its tax rules, which allow US digital giants to report their income from across the bloc in any member state. That leads them to pick low-tax nations such as Ireland, the Netherlands or Luxembourg, depriving other nations of their share of the revenue even though they may account for more of a firm’s earnings.
"The heads of these companies know themselves that this system can’t continue," Le Maire said.
Critics say the tax-avoidance strategies used by the tech groups known as Gafa — Google, Amazon, Facebook and Apple — deprive EU governments of billions of euros while giving them an unfair advantage over smaller rivals. The Organisation for Economic Co-operation and Development says such strategies cost governments around the world as much as $240bn a year in lost revenue, by a 2015 estimate.
Asked if the proposed rate might be criticised as too low, Le Maire said: "I would rather have a law that can be implemented quickly instead of drawn-out negotiations."
Big US tech groups appear to believe the tax revamp is on the cards, several having announced pledges to pay more in each country where they operate.