Spain will press ahead with a digital tax, following in the footsteps of France, Italy, and the UK, according to El Pais.
The plan for a so-called digital tax will go ahead despite threats of punitive US tariffs on French, Italian, and British goods. The US is mounting pressure, threatening to increase tariffs on French goods by 100%.
“Ideally, there would be a global agreement or failing that, one on the European level, but if there is no deal in these two areas we will have to act on a national level,” caretaker Economy Minister Nadia Calviño said.
“I think with the announcement of potential tariffs or putting them in fact, we have to be careful to choose our words,” the President of the European Commission Ursula von der Leyen told a press briefing in Brussels on Wednesday.
France is leading the campaign against US digital tax avoidance.
Finance Minister Bruno Le Maire has introduced a 3% tax on digital behemoths who have a turnover of more than €25 million in France and €750 million globally. Italy has the same global threshold but a lower €5,5 million national limit.
The so-called “Google tax” model seeks to charge companies based on users-per-country and the revenue stream they generate. There are roughly three taxable parameters: advertising revenue (Facebook, Google), retail consumer base (Amazon), and the sale or transfer of data collected from the users. That means that for 2019 alone, US companies could pay a €400 million in France.
France has agreed to comply with a multilateral taxation regime currently being negotiated by the OECD when that comes into operation.
A digital tax is one of the measures included in the Socialist Party’s (PSOE) manifesto ahead of the November 10 election. The previous PSOE administration already included the Google tax in its October 2018 agreement with Podemos, ahead of a failed attempt to pass the 2019 budget. In Spain, it is estimated that a tax similar to the one introduced in France could yield €850 million a year.