France and Germany are in favour of increasing taxation of multinational tech companies
The French finance minister Bruno Le Maire said he wanted to push for new EU rules on taxing digital companies by 2019.
In Germany, the CDU/CSU and SPD who have just signed a coalition agreement (pending approval by SPD members) also indicated that they wanted to fight multinational tax avoidance and reform the European corporate tax system.
According to Reuters, Le Maire said: “It’s not possible, not sustainable, that we tax manufacturing industries while billions in profits earned by GAFAs on European soil evaporate.”
US digital companies, such as Google, Amazon and Apple, set up complex intra-group arrangements to pay low single-digit tax rates on profits derived from European customers.
The French president, Emmanuel Macron, has proposed taxing revenues instead of profits to avoid companies shifting profits from where they are earned to lower tax jurisdictions, such as Luxembourg.
Reuters reported that:
“The EU is mulling new tax rules on digital companies which may include a tax on their turnover, a levy on online ads or a withholding tax on payments to internet firms.”
In Germany, the parties they supported “a common, consolidated tax base and minimum rates of business taxation.”
This would distribute companies’ European profits to countries proportionate to where their customers and operations were located, rather than allowing them to channel the profits into lower tax jurisdictions.