Europe Wants Additional Taxes From Large Tech Companies


After the US declared talks regarding taxation of tech companies to be at an impasse, Europe is continuing the push.

The trans-Atlantic trade conflict is escalating as European officials are pushing forward with plans to tax tech giants after the US declared the issue at an impasse, according to the Wall Street Journal.

On Thursday, French Finance Minister Bruno Le Maire announced that France will resume collecting a 3 percent tax on revenue from digital services if an agreement cannot be reached by the end of 2020. The agreement would need to contain a system for reallocating tax revenues from large tech companies. Paolo Gentiloni, the European Union’s economy commissioner, stated that there were plans to pursue a tax if international talks fail.

“Whatever happens, we will apply a tax to digital giants in 2020,” Mr. Le Maire said. Furthermore, he stated that the US was the only country holding back a deal that is “within a few centimeters of an accord.” These comments came after US Treasury Secretary Steven Mnuchin sent a letter to France, the UK, Italy and Spain explaining the US position on digital taxation. Le Maire described the letter as a “provocation for everyone who was negotiating in good faith.”

Countries have been trying for years to determine a sufficient method of distributing multinational company profits. The current rules distribute taxes where value is created, but multinational tech companies can sell their products across borders without paying taxes in the country where the product is consumed. European companies want more tax dollars from these tech companies, but the US has opposed any legislation that targets tech companies.

The US has threatened to impose retaliatory tariffs on any country that implements a tax on digital companies. Mr. Gentiloni stated the EU would stick together through any results, possibly insinuating a new trade conflict.

OECD Secretary-General Angel Gurría urged all countries to “remain engaged in the negotiations.” “This, in turn, would trigger tax disputes and heightened trade tensions,” he said. “A trade war, especially at this point in time, would hurt the economy, jobs and confidence even further.”

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