" />
Business

France, Spain, Italy, Germany seek to tax tech giants on revenue

France, Spain, Italy, Germany seek to tax tech giants on revenue
Ben Allen

France has led a European charge to start taxing tech giants like Google and Facebook on the revenue they earn in each country rather than according to where they’re based.

“We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries.”

According to Reuters, France found support in Spain, Italy, and Germany for the push as the four countries signed a letter to the EU’s Estonian presidency with the bloc’s executive Commission in copy, saying, “We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries.”

At present big tech companies tend to locate subsidiaries in low-tax countries like Ireland while operating and earning revenue Europe-wide.

Both France and the UK have taken Google to court recently over their taxes, in the French case it was ruled that Google did not have to pay any back-taxes. While in the UK case it was ruled that Google should pay £130 million [$172.4 million] (which was seen at the time as spare change) while also coming to an agreement that Google would thenceforth pay the UK government taxes based on its ad revenue.

The UK is conspicuously absent from the discussions as it is currently embroiled in negotiating its exit from the European Union, although the discussion itself may have been brought forward in anticipation of the UK’s potential maneuvers post-Brexit. The day after the vote to leave the EU, the UK Treasury slashed corporation tax from 20% to 15%, then in November the UK government announced a further review of corporation tax.

The move to tax tech companies on revenue may well be an attempt to outflank a probable move by the UK to undercut its EU neighbours and attract business post-Brexit. We might expect more of this jostling in the future, as the UK could look to arrange its statute books in such a way that they’re close enough to EU laws for businesses to operate across Europe from the UK, but different in crucial ways so as to make it beneficial to set up shop in London or Manchester.

The move also fits with the recent direction of the French government under Emmanuel Macron, who was elected on a centrist pro-business platform. France has been under pressure from Germany and other EU countries to loosen its strict labour laws in order to improve the trading power of the bloc. Last week Macron unveiled his proposals which will see collective bargaining power reduced and a cap introduced on compensation from labour court rulings.

Macron is beginning to lose popularity but is heading in a direction agreeable to the international community. With France brought up to the norms of labour laws and the playing field leveled with revenue taxes, Europe becomes a much more open field for tech companies to operate in.

Click to add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business
Ben Allen

Ben Allen is a traveler, a writer and a Brit. He worked in the London startup world for a while but really prefers commenting on it than working in it. He has huge faith in the tech industry and enjoys talking and writing about the social issues inherent in its development.

More in Business

Punks at heart: the tech-savvy reinvention of corporate social responsibility

Daniel SanchezSeptember 20, 2017
Chatbots, mobile, phone, marketing

The way to your customers’ wallets is through their mobile phones

Zac LavalSeptember 18, 2017
The Croatian startup setting the benchmark benches everywhere

The accelerator behind Polymorph is on a global search for new applicants

Sam Brake GuiaSeptember 18, 2017
amazon headquarters

Amazon’s second headquarters: there are really only two criteria

Ben AllenSeptember 15, 2017
ai jobs

Just because AI hasn’t yet taken our jobs doesn’t mean it won’t

Ben AllenSeptember 15, 2017
job search platform

Relink Labs: Job searching in the 21st century

Nicolas WaddellSeptember 14, 2017
digital marketing

Digital Marketing for Small Businesses

John MasonSeptember 12, 2017
eretail

The eRetail Story: Problems solved, in progress and yet to come

Ben AllenSeptember 12, 2017
business waste

How businesses are profiting by reducing waste

Zac LavalSeptember 11, 2017