EU States Can't Agree On How To Tax Tech Giants

6th November 2018

Malta is among the countries opposing the imposition of a revenue-based tax on internet firms.

The EU’s hopes of settling a European digital services tax on internet giants by next month have been dashed, with several member states declaring their opposition to it.

At a meeting of EU finance ministers in Brussels, Malta was among the countries, including Sweden, Denmark and Ireland, which opposed the imposition of a revenue-based tax on internet firms, arguing that it would harm their economic competitiveness.

The EU’s draft plans to impose a 3 per cent tax on the revenues rather than the profits of global tech companies such as Amazon, Facebook and Google, spearheaded by France’s President Emmanuel Macron, would completely transform traditional corporate taxation rules.

But this plan has been beset with a host of legal and political opposition from smaller, more open member states economies, including Malta.

EU tax decisions need the unanimous agreement of all member states to go ahead. Spain, Italy, and the UK have announced they will go ahead with national tech taxes in the absence of broader agreements.

A new compromise on Mr Macron’s idea, supported by France and Germany, sees the EU instead pressuring the OECD to accelerate talks for an international solution and have its own tax “ready” if negotiations don’t advance in 2020.

National diplomats said that time was needed to discuss the Franco-German proposal.

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