{"id":9128,"date":"2017-09-11T13:22:38","date_gmt":"2017-09-11T13:22:38","guid":{"rendered":"https:\/\/rsoftsolution.com\/blog\/france-germany-spain-italy-call-for-turnover-tax-for-tech-giants.html"},"modified":"2017-09-11T13:22:38","modified_gmt":"2017-09-11T13:22:38","slug":"france-germany-spain-italy-call-for-turnover-tax-for-tech-giants","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/france-germany-spain-italy-call-for-turnover-tax-for-tech-giants.html","title":{"rendered":"France, Germany, Spain, Italy call for turnover tax for tech giants"},"content":{"rendered":"


\n<\/p>\n

Several of the European Union\u2019s major economies are calling for tax reform across the bloc that responds to where tech platforms generate revenue, not just where they book profit \u2014 arguing that the current system allows digital giants to minimize tax liabilities by using subsidiaries sited in low-tax countries such as Ireland.<\/p>\n

According to Reuters<\/a>, finance ministers in France, Germany, Spain and Italy have written a joint letter\u00a0calling for digital multinationals such as Amazon and Google to be taxed in Europe based on their revenues. \u201cWe should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries,\u201d the four ministers wrote in a letter seen by the news agency.<\/p>\n

France is apparently leading the push to reform taxation rules and create an\u00a0\u201cequalization tax\u201d on revenue earned from digital business activity that would bring taxation to the level of corporate tax in the country where the revenue was earned.<\/p>\n

Last year the UK Treasury reached an agreement with Google<\/a> that it would pay tax on UK ad revenue going forward, following an enquiry into its existing tax arrangements (at the same time the company paid just \u00a3130M in back taxes \u2014 an amount critics described as derisory).<\/p>\n

Of course the UK is absent from this push, given it\u2019s currently negotiating its exit from the bloc. But brexit may well also be on the minds of the EU ministers given indications the UK is looking at reducing its domestic rate of corporate tax \u2014 and could do so radically after it leaves the EU in a bid to make itself a more attractive location for businesses vs Europe (the UK government announced a review of the corporate tax rate last November<\/a>). So brexit poses a strategic risk to tax receipts within the EU \u2014 and could strengthen the case for a system that can tax revenue.<\/p>\n

The four finance ministers are apparently intending to present their thoughts to other EU counterparts at a meeting later this month where a discussion on the specific tax reform concept has also been scheduled.<\/p>\n

\u201cThe amounts raised would aim to reflect some of what these companies should be paying in terms of corporate tax,\u201d the ministers said in the letter, which was reported earlier by the Financial Times<\/a>.<\/p>\n

The FT reports that a French government official suggested a turnover tax\u00a0could be set at somewhere between 2 and 5 per cent of revenue.<\/p>\n

Of course any change in the bloc\u2019s taxation rules would need to be agreed by all EU Member States \u2014 including low-tax countries such as Ireland and Luxembourg. Which presents one clear barrier to reform.<\/p>\n

A spokesman for the European Commission told us that the issue of taxing digital companies is something it\u2019s been looking at for several years, while welcoming the interest being shown by Member States.<\/p>\n

Vanessa Mock, spokesperson for Taxation and Customs Union, provided TechCrunch with the following response:<\/p>\n