Home Technology Regulation Four EU states want big tech to pay tax on revenue

Four EU states want big tech to pay tax on revenue

Four EU members have proposed that big multinational technology companies like Apple and Google should pay taxes in Europe on their revenue, and not profits.

The finance ministers of France, Germany, Italy and Spain said in a letter seen by Reuters: "We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries."

Signed by French Finance Minister Bruno Le Maire, Wolfgang Schaeuble of Germany, Pier-Carlo Padoan of Italy and Luis de Guindos of Spain, the letter was sent to the EU’s Estonian presidency with a copy to the group's executive Commission.

The push to curb tax avoidance by such companies has been led by France which has received strong support from other countries that are also annoyed about the small amount of tax that these companies pay under existing rules.

The EU ordered Apple to repay €13 billion (A$19.73 billion), in back taxes last year, claiming that a number of deals the company cut to do business in Ireland were illegal.

Apple appealed against the order in February.

The four finance ministers asked the EU to devise a solution so that an "equalisation tax" on turnover would result in corporate tax paid in the EU being the same as in the country where the money was earned.

They said they would present the idea to their EU colleagues at a meeting scheduled for 15 and 16 September.

The EU presidency has on its agenda for the meeting an item to discuss making it possible for firms to be taxed where the create value and not only where they are resident for tax purposes.

In July, Google won a case in France against a €1.2 billion tax bill, with a court ruling that the search company had not abused tax loopholes to avoid paying its fair share of taxes.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.