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EU wants US tech companies to pay tax

by on23 July 2018

US Tech horrified

European finance leaders called for progress on global rules to tax the digital economy at a meeting of G20 finance ministers and central bankers in Argentina on Sunday.

The final communique reaffirmed a commitment to address the impacts of the shift to a digital economy on the international tax system by 2020, without giving more details.

The European Commission, the executive arm of the European Union, proposed rules earlier this year to make digital companies pay more tax, with US tech giants such as Alphabet’s Google, Facebook and Amazon set to foot a large chunk of any bill.

Some 200 companies would fall within the scope of the new tax, European officials said at the time, estimating additional annual revenues of about five billion euro ($6 billion).

European Commissioner for Economic and Financial Affairs Pierre Moscovici told reporters at the G20 meeting that major digital companies had “to pay their fair share of tax, because basically what we are talking about here is fairness”.

He wanted a turnover tax to be adopted before the end of the year as an interim solution.

Some EU members have voiced concerns their companies could be affected by such a tax, and international partners may respond with retaliatory measures.

US Treasury Secretary Steven Mnuchin said in a statement earlier this year that he “firmly opposes proposals by any country to single out digital companies”, noting that those companies were key contributors to the US economy.

The European Commission wants a long-term, global solution based on a new method of calculating tax rates but has pushed in the meantime for the revenue tax to recoup revenues lost by EU states to large digital firms, officials said.

Last modified on 23 July 2018
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