Vestager Calls For Europe To ‘Take The Lead’ On Digital Tax

EU competition commissioner Margrethe Vestager has called on Europe to “take the lead” on a digital tax in the absence of an international consensus, as France’s National Assembly prepares to debate a national law on the issue.

Her comments follow a meeting of EU finance chiefs over the weekend at which Sweden, Finland, Ireland and Denmark blocked a draft EU-wide digital tax proposal.

“We are becoming an increasingly digital world and it will be a huge problem if we do not find a way to raise (digital) taxes,” Vestager told France Inter radio.

“The best thing is a global solution. But if we want to obtain results in a reasonable period of time, Europe must take the lead.”

Consensus

The EU has attempted to reach a resolution on the issue in recent months, but has failed to reach a consensus in the face of opposition from countries such as Ireland, where major global tech firms have their European offices.

The EU initiative, championed by France, would aim to impose a tax on the revenues of major tech firms, and is intended as a way of compensating for an international tax system that allows overseas technology and internet companies, such as Amazon, Apple, Facebook and Google, to pay less tax in Europe than their domestic counterparts.

Taking its inspiration from the EU project, France’s National Assembly on Monday is to begin debating a national law that would impose a 3 percent tax on the revenues of tech companies with a turnover of more than 750 million euros (£646m).

French economy minister Bruno Le Maire said the law was intended as a “step” toward a “fiscal policy for the 21st century, more just and more efficient”, AFP reported.

International negotiations

He said national initiatives in France, Austria and elsewhere would serve as a “lever” in international negotiations, with the aim of achieving an accord within the Organisation for Economic Co-operation and Development (OECD) over the next year, after which France would, “naturally”, withdraw its national tax.

Le Maire estimates that the biggest tech firms pay on average 14 percent less tax in Europe than other enterprises, at 9 percent compared to 23 percent.

Vestager said France’s law was “paving the way forward” and that member states who wished to push forward should do so, after which those initiatives can be “harmonised” at the European or international level.

The UK has a national digital tax initiative of its own, introduced last year, but has likewise said an international accord would be preferable.

The EU had initially hoped to push matters forward at a European level to keep tax regimes within the bloc from fragmenting.

The US opposes such proposals, calling them “highly discriminatory” against tech firms based in its territories.