Commission plans digital tax for Christmas

Alexandros Michailidis / SOOC

Commission plans digital tax for Christmas


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The European Commission is planning a new tax on technology behemoths, the BBC reported on Wednesday.

The tax could see US technology giants such as Facebook, Amazon and Google presented with a €5bn bill by Christmas, according to European Economic Affairs Commissioner Pierre Moscovici.

Moscovici notes that a tax needs to be introduced before January when the political agenda will be dominated by Brexit (March) and the European Elections (May).

Introducing this law would require EU member state consensus. Germany and France are pushing for resolute action on taxation, but Ireland, the Czech Republic, Sweden and Finland are raising objections.

Member states object to special tax treatment of digital behemoths. To circumvent this objection, the European Commission has proposed a 3% tax on the revenues of internet companies with global revenues above €750m, which has the same effect.

Most US companies pay tax in the US, where they are headquartered. Moscovici wants to move from a system based on corporate residence to taxing economic activity, irrespectively of where the company is located.

While most corporations pay an effective tax of 23%, digital behemoths pay approximately 9%, the Commissioner told the BBC.

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