France, Germany, Italy, and Spain urge taxation of digital multinationals like Amazon and Google

France, Germany, Italy, and Spain want digital multinationals like Amazon and Google to be taxed in Europe based on their revenues, rather than only profits as now, their finance ministers said in a joint letter.

Google. Reuters.

Google. Reuters.

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.

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

“We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries,” the four ministers wrote in a letter seen by Reuters.

The letter, signed by French Finance Minister Bruno Le Maire, Wolfgang Schaeuble of Germany, Pier-Carlo Padoan of Italy, and Luis de Guindos, was addressed to the EU’s Estonian presidency with the bloc’s executive Commission in the copy.

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.

“The amounts raised would aim to reflect some of what these companies should be paying in terms of corporate tax,” the ministers said in the letter, first reported on by the Financial Times.

Le Maire, Schaeuble, Padoan, and de Guindos of Spain said they wanted to present the issue to other EU counterparts at a meeting from 15 September to 16 September, in Tallinn.

The EU’s current Estonian 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.

Published Date: Sep 10, 2017 10:12 AM | Updated Date: Sep 10, 2017 10:12 AM