EU PLANS TO
RAISE TAX BILL OF ONLINE GIANTS GATHER MOMENTUM
Nearly one
third of European Union states backed a plan to tax digital multinationals on
their turnover, France said on Friday, as the EU weighs a range of other measures
to increase the tax bill of companies like Google and Amazon.
European
Economic and Financial Affairs Commissioner Pierre Moscovici gestures during
his meeting with Greek Prime Minister Alexis Tsipras (not pictured) at Maximos
Mansion in Athens, Greece, July 25, 2017. REUTERS/Alkis Konstantinidis/Files
TALLINN: Nearly
one third of European Union states backed a plan to tax digital multinationals
on their turnover, France said on Friday, as the EU weighs a range of other
measures to increase the tax bill of companies like Google and Amazon.
The moves are
part of a growing campaign in the EU to claim tax revenues that online giants
are accused of skirting by routing most of their profits to low tax rate
states, like Ireland and Luxembourg.
"The digital
economy should be taxed as the rest of the economy," the EU commissioner
for taxation, Pierre Moscovici, told reporters upon his arrival on Friday to a
meeting of euro zone and EU finance ministers in Tallinn, the Estonian capital.
A report
published on Thursday by influential EU lawmaker Paul Tang estimated that
Google, which has its EU tax residence in Ireland, paid taxes not higher than
0.8 percent of its EU revenues between 2013 and 2015.
Facebook, also
based in Ireland, had a ratio as little as 0.1 percent in the same period,
while Luxembourg-based Amazon paid almost nothing as it reported nearly no
profits.
Facebook and
Google were not immediately available to comment on the proposals when
contacted by Reuters.
COMPETING PLANS
Most of the 28
EU states agree in principle with more effective taxation of digital companies,
but differences remain on how to move forward.
A plan proposed
by France to tax large digital corporations on their turnover, rather than on
their profits, is gaining supporters, although still needs technical work.
France's
Finance Minister Bruno Le Maire told a news conference on Friday that a total
of nine countries "formally joined the initiative". In addition to
France, they are Germany, Italy, Spain, Austria, Bulgaria, Greece, Slovenia and
Latvia.
A tax on
turnover would raise revenues also from companies, like Amazon, that do not
report profits, and would be likely applied quickly, a European official said.
However, it
would need to be made compliant with EU internal market rules. States could
also apply it unilaterally, but that would expose them to a higher chance of
legal challenges, the official said.
Opposition from
smaller states would need to be overcome, as countries like Ireland and
Luxembourg may lose tax revenues from the new framework.
Tax reforms in
the EU need unanimity among EU states, a factor that has blocked many overhauls
in the past.
Estonia, who
holds the EU rotating presidency, is pushing for a more structural approach. It
wants the EU to agree that a company could be taxed when it is
"virtually" present in a country, through a digital platform for
instance.
At the moment,
businesses are taxed only in countries where they have a concrete presence,
such as a plant.
This change
could be introduced in a review of EU rules on the tax base that are under
discussion in the Parliament and among EU states. Tang plans to submit an
amendment going in that direction.
The European
Commission, the EU's executive, said it will present in the coming days a
document listing several options for moving forward.
A Commission
official said the document could propose five or six possible measures,
including the French and the Estonian plans. He warned against risks of
diverging taxation in EU states and insisted a compromise on a common set of
rules should be the objective.
The document
will be ready for a summit of EU leaders dedicated to digital issues that will
be held in Tallinn on Sept. 29, Moscovici said.
(Reporting by
Francesco Guarascio @fraguarascio, editing by Robin Emmott)
Source:
Reuters,
http://www.channelnewsasia.com/news/technology/eu-plans-to-raise-tax-bill-of-online-giants-gather-momentum-9222100
REVIEW BASED ON THE ARTICLE ABOVE : (THIS REVIEW COMPLETELY BELONGS TO ME)
The article I’ve read is mainly talks about EU plans to raise tax bill of online giants like Google and Amazon. According to what France’s said on Friday, nearly one third of European Union states backed a plan to tax digital multinationals on their turnover, as the EU weighs a range of other measures to increase the tax bill of companies like Google and Amazon. The plans are the part of growing campaign in the EU to claim tax revenues that online giants are accused of skirting by routing most of their profits to low tax rate states, like Ireland and Luxembourg. Based on a report published on Thursday by influential EU lawmaker Paul Tang estimated that Google, which has its EU tax residence in Ireland, paid taxes not higher than 0.8 percent of its EU revenues between 2013 and 2015. Facebook, also based in Ireland, had a ratio as little as 0.1 percent in the same period, while Luxembourg-based Amazon paid almost nothing as it reported nearly no profits. A plan proposed by France to tax large digital corporations on their turnover, rather than on their profits, is gaining supporters, although still needs technical work. However, it would need to be made compliant with EU internal market rules and also tax reforms in the EU need unanimity among EU states.
For me, the article is quite amazing. The sentence is easy to understand although there are
some difficult words. The article is much interesting because I’ve
never read it before, and it gives me lots of knowledge that not only Indonesia
that has a problem in taxes which is influence the national’s revenue. But also
the other countries. The article makes me curious about how much the disadvantages caused by
Google and Facebook, because it not mentioned on the article. Then I searching
for the answer in pemeriksaanpajak.com, telling that
EU lost 85 Trillion rupiahs on Google and Facebook Taxes. As
both companies are known to manage most of their EU revenues to countries with
low tax provisions. This step also automatically allows them to pay taxes in
the EU region much lower than the taxes they have to pay in countries in other
regions. 85 trillion rupiahs, a very large nominal which of course we can not imagine
how much if it cashed.
And I'm sure both Google and Facebook's own revenue, folding over 85 Trillion.
Hence, I agree with EU’s plan to impose tax digital multinationals on their turnover and
increasing the tax bill of companies.
In
conclusion, I strongly support the EU’s plan because the digital economy should
be taxed as the rest of the economy and impose the taxes on the company’s
turnover. However, it would need to be made compliant with EU internal market
rules. Because there is an opposition from smaller states like Ireland and
Luxembourg, they may lose tax revenues from the new framework. So that, the tax
reforms in the EU need unanimity among EU states. And I think, it should be further regulated by law and given strict
sanctions, so that
they are willing to pay taxes.
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