The European Commission will unveil a new tax regime for internet giants by the end of March, the Commissioner for economic and financial affairs Pierre Moscovici told France’s Radio J on Sunday.
The effective tax rate for US internet giants in Europe is estimated to be 9%.
According to Moscovici, the proposal will be an “electroshock” for the digital economy. “Member states want to tax the huge profits generated by digital economic activity in their country,” Moscvici said.
The central idea of the European Commission is an EU-wide Common Consolidated Corporate Tax Base (CCCTB) tax on all corporate behemoths, distributing revenue on market share basis. This would benefit major markets, including France, Italy, and Germany. However, the European Commission expects a backlash from countries like Luxembourg, Ireland, and the Netherlands who have built a special relationship with technology giants founded on low-tax regimes.