European Union states divided over digital services tax proposal

Cornelia Mascio
Novembre 9, 2018

These companies have come in for criticism over the taxes they pay in European countries, and France just wants them to pay their fair share.

Earlier, the European Commission called for slapping a three-percent tax on digital revenues of internet giants. After the United Kingdom announced its tax last week, Representative Kevin Brady, a Republican from Texas, called the measures troubling and would prompt a review of the USA tax and regulatory approach to "ensure a level playing field in global markets".

Arriving at a meeting of the 28 Finance ministers of the EU in Brussels, The Mayor told AFP: "the directive must be adopted by December 2018 at the last european Council of this year, but we are open to a postponement of the entry into force to allow time for the OECD to make a more complete proposal".

"There is no disagreement with Mr Scholz on this".

The change of tack comes after France and the European Commission first advocated a provisional bloc-wide solution until an worldwide scheme is found at the Organisation for Economic Cooperation and Development, which groups major world economies.

But it requires the support of all 28 European Union states and is opposed by a number of them, including small, low-tax countries like Ireland that have benefited by allowing multinationals to book profits there on digital sales to customers elsewhere.

France has offered to delay an EU-wide tax on tech giants in a bid to salvage the levy, which faces fierce opposition from Ireland and the Nordic countries, in an embarrassing setback for Emmanuel Macron in Brussels.

The tax has been championed by French president Emmanuel Macron as a way of appeasing voters' indignation at the low tax bills of large USA internet companies such as Amazon and Google, ahead of European Parliament elections next year.

"The debate shows that we're moving in the right direction".

Similarly, Sweden's finance minister, Eva Magdalena Andersson, said that issues of income allocation should be left to global agreement. Donohoe asked his fellow ministers in a public session.

The EU proposal is also meant to stop other countries going it alone with their own digital tax and creating a patchwork of schemes across the continent.

Given the way that the tax "has been framed as aiming at USA companies, of course there will be a reaction from the United States", added Danish Finance Minister Kristian Jensen.

EU states are discussing two options put on the table by the European Commission.

The UK and other countries, such as Spain and Italy, have already promised to implement their own version of the tax.

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