A European Union plan to tax Google, Facebook and other internet firms risks failure after a handful of member states announced their opposition.
EU countries are studying proposals to levy a 3% tax on big internet companies that make money from user data or digital advertising, in a bid to level the playing field with bricks-and-mortar companies that pay more tax.
EU states divided over digital tax, fear U.S. retaliation
EU governments are divided over a plan to tax big internet firms like Google and Facebook on their turnover, fearing retaliation from the United States, and could delay its application until a global deal is reached, top officials said on Tuesday.
Under a proposal from the EU’s executive Commission in March, EU states would charge a 3 percent levy on the digital revenues of large firms that are accused of averting tax by routing their profits to the bloc’s low-tax states.
France says EU must have directive on digital tax this year
The French government insists that the European Union must agree on a directive by the end of the year to tax large international companies doing business in the digital sphere like Google, French Finance Minister Bruno Le Maire said.
“Lets be clear – this is the red line for France, there must be the adoption of a directive on digital taxation by the end of this year,” Le Maire told reporters on Tuesday on entering a meeting of EU finance ministers.
Germany says EU should revise, delay digital tax plan
Germany’s Finance Minister Olaf Scholz said on Tuesday the European Commission should revise its plan for a EU-wide tax on large digital companies and stressed the new levy should be applied only if there is no global deal by the summer of 2020.