EU Ready To Raise Google’s Taxes Even Without US Support

September 21, 2017 - Written By Dominik Bosnjak

The European Commission is prepared to raise taxes on Google, Amazon, Facebook, and other multinational internet giants even without support from the United States and other Western nations, the legislative body of the political bloc said earlier today. Many EU state members have been seeking to implement a digital tax reform simultaneously with other parts of the world but are now seemingly ready to stop waiting for a global solution to the issue and are prepared to lead by example. The political bloc named three possible techniques for making the tech giants pay their fair share of taxes within the European Union; the simplest solution would be to tax companies based on revenues instead of profits, the second entails a retention tax imposed specifically on Internet firms, and the third is based on extra fees for online advertising.

The three options may be implemented individually or work in conjunction, the Commission suggested, noting how it would still prefer to enact the new measures in cooperation with the Organization for Economic Co-operation and Development, i.e. some of the world’s richest countries. All proposals outlined on Thursday are understood to be band-aid solutions that should pave the way for a more comprehensive digital tax reform which could take years to properly implement. A number of EU state members with low tax rates like Luxembourg and Ireland are still opposing the changes and would likely veto any traditional enactment attempt. Due to that state of affairs, the Commission may opt for less conventional legislative methods, with one of the options being to take away veto rights on tax-related manners of opposing countries, citing market distortions mentioned in one of its treaties. If the bloc would move forward on such a move, it should do so by December which is when its first concrete moves on the matter are expected to be made.

An official legislative proposal could be drafted by spring, as revealed by EC Vice President Valdis Dombrovskis earlier today. No concrete decisions on dealing with opposing states have yet been reached and the top legislative body of the EU is still hoping for a unanimous ruling. According to recent estimates, Google and Facebook alone managed to avoid up to $6.42 billion in EU taxes between 2013 and 2015 by taking full advantage of the bloc’s existing tax system which wasn’t enacted with digital companies in mind.