A major change to the way the European Union taxes companies such as Google and Amazon is coming within ‘weeks’, says French economy minister
The European Union (EU) is planning to announce an reform initiative in the coming weeks that could see tech firms such as Google, Apple, Facebook and Amazon pay significantly more tax, according to French economy minister Bruno Le Maire.
A European directive will be unveiled in the coming weeks,” Le Maire told French newspaper Le Journal de Dimanche on Sunday. “It will mark a considerable advance.”
The EU and national governments in Europe have faced criticism for continuing to allow multinational tech firms to make use of legal loopholes to pay low levels of tax by declaring their profits in countries such as Luxembourg or Ireland.
The new initiative could see such companies taxed on their revenues from customers in a given country, rather than the location of their European headquarters.
Taxing revenues, not profits
The proposed tax ranges from 2 to 6 percent of turnover, according to Le Maire. “We will be closer to 2 than to 6,” he said.
For those who consider that too moderate, the minister said it was a “point of departure”.
“I prefer a text that can be applied quickly rather than interminable negotiations,” he said. “We will improve it afterward.”
Le Maire said he believes opposition to such a reform from Luxembourg and Ireland is diminishing, and said tech leaders themselves understand that the current system is “untenable”.
British MPs have criticised tech companies’ tax arrangements as “immoral”.
As a result of public pressure Google struck a deal with HMRC in 2015 to pay £130 million in taxes dating back 10 years. The company revealed in 2013 it had paid only £11.6m in corporation tax the previous year.
Tech companies have defended their tax structures, saying they abide by tax laws as they’re currently written.
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