A global attempt to prevent large, multinational companies from shifting their profits to lower-tax jurisdictions is setting off a fight between the United States and Europe, as policymakers on both sides of the Atlantic spar over efforts to impose new taxes on foreign firms.
On Wednesday, the European Commission is expected to take aim at Silicon Valley’s tech giants with a proposal to seriously revamp how technology companies are taxed in the 28-nation European Union. The plan, outlined in a draft obtained by The New York Times, would tax digital media companies based on where they generate revenue, rather than where they have their regional headquarters, which are often in countries like Ireland and Luxembourg that have lower tax rates.
EU to unveil plan to tax turnover of big U.S. tech firms
The European Commission will propose rules on Wednesday designed to make digital companies pay their fair share of tax and set to hit U.S. tech giants such as Google and Facebook.
The Commission is expected to propose that companies with significant digital revenues in Europe pay a 3 percent tax on their turnover, according to a draft seen by Reuters last week.