Brussels raises new 3% tax on technology sales

The assessment to companies like Google, Facebook or Apple would raise 5 billion a year

Google, Facebook and Apple have specialized in locating in a fictitious way their operations in microaffiliates located in territories or countries where corporate tax is low or even practically nil. And they have thus turned business taxation into a black hole species: digital businesses pay an average tax rate of 9.5% in European Union (Google has paid some year less than 0.1% in Ireland), when traditional companies pay more than double, An average of 23.2%.

More information

• The great European battle over Titans ‘ taxes on digital economy
• France, Germany, Italy and Spain launch a plan for digital giants to pay more taxes
• America will be a major fiscal rival for Europe that Amazon or Apple

“The system is unfair and jeopardizes stability of public finances of Member States,” according to a Commission recommendation to twenty-eight. To change this trend, Brussels proposes to tax technology that billed more than 750 million (and more than 50 million in Europe) with a digital tax of 3% on their income, which would be a levy of about 5 billion euros per year for coffers of European partners.

The EU executive arm actually suggests a fork that goes from 1% to 5% — which would provide up to 7 billion in case of highest levy — but he opted for that 3% “after an analysis of impact of that measure”, according to documents that have been accessed EST and newspaper.

It is an indirect tax of temporary character to oblige to pay to Treasury activities that currently escape from Treasury, from online publicity to services of intermediation platforms or companies that take advantage of data Provided by users. In addition, Brussels proposes changes in taxable base of corporate tax, so that companies that do not have their headquarters physically in EU territory stop evading payment.

International Impulse
74% of Europeans demand that their governments act against tax evasion. Three quarters of citizens believe that current rules are a kind of gruyere cheese, with jupiterinos holes for digital companies. And yet only thing y have obtained so far are vague promises: OECD — rich Country Club — and G-20 — industrialized and emerging economies — have been dizzying partridge for years, vowing and swearing that cat-and-mouse tax game with big S companies is at an end.

Europe has decided to take a step because some countries have taken unilateral decisions (France has just imposed a digital rate) and that can undermine sacrosanct single market. “The ideal would be an international response, but EU can put itself at forefront of adopting global solutions to digital taxation,” European proposal points out.

The data tells stories. And tax rates paid by multinationals are bleeding: companies take advantage of disparities between national tax regimes to lower their taxes, with companies that enjoy “close to zero” liens in countries where they have significant market shares, “according to Brussels. Spain is one of those cases: tax bill of Facebook, Amazon and Google is derisory, thanks to networks that allow to avoid payment to countries with very low taxation. Some of these countries, for more inri, are part of EU: Ireland, Luxembourg, Belgium and Netherlands, together with several eastern partners, have made fiscal competition downwards a business model, almost a way of life.

And that is precisely problem. Germany, UK, France, Italy, and Spain — five largest EU countries — are leading a strange coalition for digital taxation, something that has rarely been seen in recent decades. But usual suspects–Ireland, Austria, and Luxembourg, among others–are likely to resist such a measure, as is case every time Europe is debating taxation. The Commission’s proposal has a long way to go: The European Council, twenty-eight, must give green light so that this plan will end up being approved by European Parliament.

That gait will be anything but easy. Angela Merkel’s Germany and Emmanuel Macron’s France have raised issue to European Summit this week. “There is a group of countries favourable to implementing measures of digital taxation, but or Member States prefer to do so only on an international scale,” a high European source explained yesterday. History suggests that high European policy is capable of always inventing its own paths to such blockades. Except in one case: taxes, where only one can proceed unanimously.

Free Municipal Wifi
The European Commission launched a first call for a thousand European Councils to access aid of up to 15,000 euros in order to finance installation of free WiFi connections in public spaces such as squares, parks, museums, Libraries and health centers. The offer is part of Wifi4EU programme, with which body chaired by Jean-Claude Juncker aims to promote access to Internet in as many towns and cities as possible before 2020. The commission warns that city councils concerned must hurry because concession will be made in strict order of request, from date of application.

This is first of calls with which EU aims to allocate up to 120 million euros to boost installation of free wifi in public spaces, reports Europa Press. The goal is to install high-speed connections in between 6,000 and 8,000 municipalities throughout community block. To this end, European Commission will launch four or calls in future, which can benefit more than 1,000 municipalities in each of m, executive arm of EU reported yesterday.