EU trundles towards taxing tech firms

Digi firms avoiding Tax blog

Many will scoff, but the EU says it’s determined to sort out the ongoing jaw-dropping ease with which massive tech firms avoid paying tax.

Speaking in Estonia last week, Pierre Moscovici, the European Commission’s tax commissioner, said that tech firms should ‘pay their fair share’ and that the ‘digital economy should be taxed’.

A paper is to be put forward to Europe’s governments by the end of the month, saying something along the lines of ‘Google, Apple, Facebook and a load of other digital firms are leeching us dry – this really won’t do’.

The paper will give Europe’s various regimes options on tackling the ongoing absurd situation so they can all ‘reach a political consensus’, so Mr Moscovici says.

Currently, not only do digital companies only get taxed on the profits they make, most of the taxation only applies in the country where they have registered their European base of operations – and for a lot of them, this is in Ireland.

The Irish government has encouraged the likes of Apple to set up their headquarters in the country by ensuring that the local tax climate is to their liking.

This has enraged the EU which has called Ireland’s position illegal.

An earlier letter by the European Commission’s president, Jean-Claude Juncker, argued that multinational companies should swiftly ‘publish key tax information on a country-by-country basis,’ and called for a ‘fair taxation package for the creation of a single EU value added tax area.’

It’s a noble idea, but still: good luck with that.

For such a plan to work, all 27 of the EU’s member states would have to agree to a new tax regime – and far be it for me to suggest that an army of large US tech firms might somehow befriend, cajole and ‘incentivise’ government ministers and bureaucrats from across the continent into making sure such a piece of legislation never comes about.

EU trundles towards taxing tech firms

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