‘Christmas Present’ for FANG: EU Promises New Tax on Tech Giants by December

Written by | Thursday, October 11th, 2018

The European Union is seeking to impose a new tax on tech giants such as Facebook, Amazon and Google (FANG) by Christmas. Pierre Moscovici, the Commissioner for Economic and Financial Affairs, said it was “doable” as good progress has been made. He also warned that if no agreement is found until the end of December, it could be the end of next year before it could be considered again.

With the Brexit, the European Parliament elections and the appointment of a new Commission, 2019 is going to be a busy year for the EU. It is therefore unlikely that technology would be a priority. “We can lead by example,” Mr. Moscovici. “Let’s do it now.” The move comes after Facebook got into a new controversy around the tax it is paying in the United Kingdom. The US social network announced it was paying £15.8m tax while its sales totalled £1.3bn. Commissioner Moscovici said that the EU needed everyone to join the efforts, including the UK.

Germany and France made it clear that they would like to see a deal by Christmas. Earlier this week, Ireland, the Czech Republic, Sweden and Finland all raised major concerns that the new tax could be against international rules on equal treatment for businesses across the world. The European Commission has this year proposed a 3% tax on the revenues of tech giants with global revenues above €750m a year. Currently, large internet companies avoid taxes on profits, in contrast with more traditional companies, because the former do not have a major physical presence in many markets. Profits are mostly declared in the country of their headquarters, which is usually the United States.

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