European Union plans to tax tech giants on local revenue

Europe



After months of speculation, France’s economy minister Bruno Le Maire announced in an interview with the JDD that Europe’s new tax model for tech giants is happening. The plan will be unveiled in the next few weeks.

Google, Amazon, Apple and Facebook have all faced different issues when it comes to tax optimizations. They’ve been routing their revenue through Ireland, Luxembourg, the Netherlands and other countries with a low corporate tax. Sometimes the money ends up in Bermuda or the tiny island of Jersey.

While they’ve all claimed that everything is legal, it has slowly become a controversial topic among European countries. They all generate over a billion dollars in revenue in Europe but pay close to nothing in taxes.

That’s why Europe’s economy ministers wanted to find a way to tax them properly that is easy to implement. And Le Maire confirmed that Europe will look at the overall revenue of tech giants in each country and tax them based on that figure.

Le Maire told the JDD that they should expect to be taxed between 2 percent and 6 percent of their revenue. He also added that the final figure will be closer to 2 percent than to 6 percent.

This represents an improvement, but the current system is still broken. Maybe some day European countries will all get together and agree on a single, unified corporate tax level across the European Union.

Featured Image: kamisoka/iStock



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