Home Technology Regulation EU seeks 'permanent' solution to tech firms' tax avoidance

EU seeks 'permanent' solution to tech firms' tax avoidance

Finance ministers from EU countries have offered cautious support for a plan to draft new tax rules for multinational technology companies like Google and Facebook.

At the same time, the ministers, who met in the Estonian capital Tallinn, said they would prefer a permanent solution that also included the US. according to a report in The Wall Street Journal.

France, Germany, Italy and Spain proposed a plan last week whereby big technology companies would pay taxes based on their revenue, and not profits.

On Friday, five more countries — Austria, Bulgaria, Greece, Slovenia and Latvia — said they supported the proposal. The EU has 28 members.

The EU is looking at measures to get these companies to pay what is deemed to be their fair share of tax. Accusations are rife of profits being routed to low-tax nations like Ireland and Luxembourg.

Aso last week, 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 ministers said they had agreed to find better ways to tax online services, though there was as yet no consensus.

“Despite some diverging opinions, we eventually came to several common conclusions,” Estonian finance minister Toomas Tõniste said. “Everyone agreed that the problem (of inqadequate taxation) exists.”

While the plan to tax revenues attracted the support of more than half the EU members, a majority wanted an agreement that was drafted at the level of the Organisation for Economic Co-operation and Development.

Tõniste said the aim was to finalise an agreement by December and then take it to the OECD.

Before that, 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.


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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.