Home Technology Regulation More EU states back big tech paying tax on revenue

Nine European Union countries have supported a move to tax big multinational technology companies on their revenue, and not profits.

The EU is considering a raft of measures to get companies like Google and Facebook to pay what is claimed to be their correct amount of tax. Accusations are rife of profits being routed to low-tax nations like Ireland and Luxembourg.

Four countries — France, Germany, Italy and Spain — proposed the change last week and French Finance Minister Bruno Le Maire told a news conference in the Estonian capital Tallinn that nine countries were now backing the move, according to a Reuters report.

The new countries backing the move are Austria, Bulgaria, Greece, Slovenia and Latvia. The EU has a total of 28 member states.

EU finance ministers met in Tallinn on Friday to consider the proposals, a day after a Reuters report said Google and Facebook may have paid anything from €5.1 billion (A$7.61 billion) to €5.4 billion less in taxes in European Union states between 2013 and 2015.

The news agency said it had obtained access to a report written by a lawmaker who has drafted tax reform that could increase the amount of taxes paid by the two online behemoths.

tax evasion US big

EU socialist lawmaker Paul Tang drafted the report which said that digital multinational companies "minimise the overall tax burden in the EU by routing all revenues to low-tax member states such as Ireland and Luxembourg".

Similar complaints have been voiced in countries outside the EU, including Australia.

Last year, Bloomberg, citing regulatory filings in the Netherlands, reported that Google had avoided paying  US$3.6 billion (A$4.49 billion) in taxes globally in 2015 by shifting US$15.5 billion to a company in Bermuda that is just a shell.

Multinational tech companies, including Apple and Microsoft, have faced questioning in the Australian Senate over tax minimisation.

Tang's report was said to focus on Google and Facebook because the two companies cite most of their EU revenues in Ireland where the rate of corporate tax is low. This allows them to pay much less tax than in other parts of the world.

The report said that Google paid tax of up to 9% outside the EU, but less than 0.82% inside the Union.

Reuters quoted Tang as writing, “Facebook’s taxes as a share of their revenues recorded outside the EU is between 28% and 34%,  whereas in the EU this is a remarkably low ratio of 0.03 percent to 0.10%."

This led to a shortfall in tax payments of between €5.1 billion and €5.4 billion between 2013 and 2015, the report claimed.

Tang is tasked with shepherding through the EU parliament tax reform that brings about equal national tax deductions on business profits.

Reuters said he planned to present a change that would make it mandatory for multinationals to be taxed in EU states where they had a “digital platform” that generated at least €5 million in annual turnover.

The current regulations allow online companies to pay taxes only where they have both a physical presence and tax residence, irrespective of where their profits are created.

The European Commission will prepare a number of options for resolving the tax problem and present them at an EU summit on digital issues to be held in Tallinn on 29 September.

LEARN HOW TO REDUCE YOUR RISK OF A CYBER ATTACK

Australia is a cyber espionage hot spot.

As we automate, script and move to the cloud, more and more businesses are reliant on infrastructure that has the high potential to be exposed to risk.

It only takes one awry email to expose an accounts’ payable process, and for cyber attackers to cost a business thousands of dollars.

In the free white paper ‘6 Steps to Improve your Business Cyber Security’ you’ll learn some simple steps you should be taking to prevent devastating and malicious cyber attacks from destroying your business.

Cyber security can no longer be ignored, in this white paper you’ll learn:

· How does business security get breached?
· What can it cost to get it wrong?
· 6 actionable tips

DOWNLOAD NOW!

10 SIMPLE TIPS TO PROTECT YOUR ORGANISATION FROM RANSOMWARE

Ransomware attacks on businesses and institutions are now the most common type of malware breach, accounting for 39% of all IT security incidents, and they are still growing.

Criminal ransomware revenues are projected to reach $11.5B by 2019.

With a few simple policies and procedures, plus some cutting-edge endpoint countermeasures, you can effectively protect your business from the ransomware menace.

DOWNLOAD NOW!

Sam Varghese

website statistics

Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

Popular News

 

Telecommunications

 

Sponsored News

 

 

 

 

Connect