A watered-down proposal on an EU-wide digital tax will be discussed by European Union finance ministers in Brussels on November 6. The aim is for the document, which has been seen by Reuters, to be agreed by the end of the year.
Under a proposal from the European Commission in March, EU states would charge a 3% levy on the digital turnover of large firms such as Google and Facebook that are accused of routing their profits to the bloc’s low-tax states.
While France and some other big EU states are pushing for a quick introduction of the tax, smaller countries such as Ireland or Luxembourg oppose the measure, fearing it could cut their tax revenues.
According to Reuters, the new proposal is aimed at overcoming this opposition. Hammered out by Austria, which holds the EU’s presidency, it proposes to set a “fixed expiry date” on the tax.
The levy was always intended as a temporary solution on capturing revenues from digital companies which escape many taxes thanks to their cross-border and virtual business.
According to Reuters, Austria has also proposed excluding the sale of users’ data from the activities covered by the planned tax, softening the Commission’s proposal. Only revenues 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 plan.