Tuesday, 06 March 2018 06:00

EU plans to tax big tech multinationals on local revenue Featured


French economy minister Bruno Le Maire says the EU has plans to tax big multinational technology companies — like Google, Apple, Facebook and Amazon — between 2% and 6% of their revenue, with the figure being closer to the lower end.

In an interview with the French website JDD, Le Maire said that the measure was being proposed as companies were routing their earnings through countries which had a low rate of corporate tax in order to avoid paying their fair share of tax.

The move to tax revenue and profits was mooted last September, during a meeting of EU finance ministers in the Estonian capital, Tallinn.

The meeting took place shortly after reports that 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.

Le Maire also spoke about Amazon's operations in his own country, saying the company was welcome because it created thousands of jobs. He noted that the American behemoth most often recruited low-skilled or unskilled workers and in areas where it was difficult to attract business.

Last month, Amazon announced that it would be adding 2000 jobs at its France operations, which would take its headcount in the country to 7500 by the end of 2018.

But Le Maire also reiterated that the government would keep an eye on Amazon's alleged "abusive" practices towards small retailers.

In September, EU socialist lawmaker Paul Tang presented a report to the finance ministers' meeting on tax reform, saying 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. Multinational tech companies, including Apple and Microsoft, have faced questioning in the Australian Senate over tax minimisation.

Tang pointed out that “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% to 0.10%".

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came 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.

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