The European Union struggles to extract more from tech firms

THERE IS, SAYS Bruno Le Maire, France’s finance minister, a need for “European sovereignty in the face of digital giants, which are now as powerful as sovereign states”. The issue is tax—or rather a lack of it. The most creative corporate tax minimisers are big, mostly American, technology firms. Countries such as France and Italy harrumph that they are deprived of billions in tax receipts each year as Google, Amazon and their kind magic profits away from where business is done to where they are taxed least. The European Commission reckons digital firms pay 9.5% in income tax on average, compared with 23.2% for firms with “traditional business models”.

The OECD, a club of mostly rich countries, was meant to tackle digital non-taxation as part of a global corporate-taxreform initiative called BEPS (Base Erosion and Profit Shifting). Progress, however, has been glacially slow. Fed up with waiting, Europe vowed to act on...

via Business Feeds

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