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Appeared on: Saturday, September 9, 2017
European Governments Want to Tax Digital Giants' Revenues

France, Germany, Italy and Spain want companies like Amazon and Google to be taxed in Europe based on their revenues, rather than only profits as now.

Currently such companies are typically taxed on profits booked by subsidiaries in low-tax countries like Ireland even though the revenue originated from other EU countries.

A joint letter signed by the finance ministers of France, Germany, Italy and Spain, the ministers say that they "should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries."

They urged the Commission to come up with a solution creating an "equalization tax" on turnover that would bring taxation to the level of corporate tax in the country where the revenue was earned.

France is leading a push to clamp down on the taxation of such companies, but has found support from other countries also frustrated at the low tax they receive under current international rules.

The EU's presidency has scheduled a discussion at the meeting about the concept of "permanent establishment", with the aim of making it possible to tax firms where they create value, not only where they have their tax residence.

France has turned to the EU for new tax rules after facing legal setbacks trying to obtain payments for taxes on activities in the country.

A French court ruled in July French court ruled that Google was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes because it had no "permanent establishment" in France and ran its operations there from Ireland.



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