The Austrian presidency of the bloc will bring together European Union finance ministers this week to discuss proposals to adopt a tax on companies’ digital turnover.
There is widespread agreement among EU governments that tax rules should be changed to increase levies on digital services. But there is no agreement yet about how to do this.
As reported by the Reuters news agency, smaller states with lower tax rates such as Luxembourg and Ireland, which host large American multinationals, want EU changes to come together with a global reform of digital taxation, which has been under discussion for years to no avail.
Larger states, such as France and Italy, which claim to have lost millions of euros of tax revenue due to digital giants’ shift of taxable profits to lower-tax countries, want a quick solution.
They support the European Commission’s proposal for an EU-wide 3% tax on digital revenues of large firms that would be introduced before a global overhaul of tax rules.
Only revenue from online advertising services, in which Google and Facebook excel, and from virtual marketplaces, such as Amazon, would be subject to the new tax, under the Austrian plan.
What is more, the plan – in line with the Commission’s proposal – is to tax only firms with a global annual turnover of €750m.