The European Union is moving forward with its initiative to prevent Silicon Valley giants such as Google and Facebook from using tax loopholes on the Old Continent and will soon publicize a detailed plan meant to inhibit such behavior, French economy minister Bruno Le Maire said last week. As the majority of tax-avoiding techniques presently employed by global digital companies in Europe are based on methods of artificially lowering their annual profits, the new law will instead target their revenues, seeking between two and six percentage points of their turnovers. No specific roadmap for the enactment of the legislation has yet been provided, with Mr. Le Maire only revealing he expects the proposal to be fully disclosed in a matter of weeks, adding that the draft will likely seek to tax closer to two than six-percent of tech revenues.
The EU's tech tax reform has been in the making since last year after top politicians of the political bloc started calling attention to the fact that numerous Internet juggernauts are successfully avoiding billions of dollars of income tax on the continent on a regular basis. Amazon, Google, and Facebook are understood to be the main targets of the incoming bill, though other global digital services such as Netflix may also be affected. Germany, France, Italy, and Spain are the EU's largest supporters of the move and most of the bloc's other members approve of the initiative, with the only exception being tax havens such as Luxembourg and Ireland. Brussels previously sought Washington's support before officially going through with the legislation but has now decided to pursue the matter independently.
Many American Internet giants are now also finding themselves under scrutiny over their privacy practices that the EU will start regulating in a much harsher manner starting May 25 when the new General Data Protection Regulation is scheduled to go into effect. Under the incoming ruleset, companies will have to be much more forthcoming when communicating their user data practices to consumers and will be more limited in regards to how they can use that information in the first place. The tech revenue tax initiative is unlikely to amount to an actual legislation going into force before late 2018.