The rapid introduction of a tax on digital companies such as Facebook and Google in Europe has failed for the time being. The EU Finance Ministers could not agree on a common Position. A German-French proposal met in the circle of Department heads in doubt. The debate should be conducted in the coming year.
The EU Commission had proposed to charge a large digital company, with a global annual turnover of at least 750 million euros, and an online turnover of 50 million euros in Europe, three percent income tax. According to estimates, digital companies pay taxes only half as much as traditional companies, since they often have seats no taxable companies or their operations in countries with favourable conditions to combine.
Germany and France argued in favour of a stripped-down digital expensive. A Three-percent sales tax only on online advertising revenues is to be decided until March 2019 and January 2021 to apply – if there is no solution at the level of the Organisation for economic co-operation and development (OECD). Originally, it should be taken into account with the digital tax, however, not only online advertising but also the sale of user data.
The push attack is too short, criticized Spain’s Minister Nadia Calviño. It must be ensured that digital companies were fairly taxed. “I have serious concerns,” said Finland’s Finance Minister Petteri Orpo. Ireland – where Facebook has its European headquarters – to the digital tax is always critical.
“Germany and France a weak and watered-down proposal will take most of the Tech giants from the responsibility,” criticized the development organization Oxfam. That would be a setback in the fight for tax justice.
EU decisions in tax matters must be taken unanimously. This makes agreement particularly difficult. The outgoing member of the EU, the UK is planning its own digital expensive.