Technology giants face European 'digital tax' blow

[Becky]

Large tech companies have been using legal means to minimise their tax bill for years. By having a legal entity in a country with a low corporation tax rate they are able to keep more of their profits for distribution to shareholders. The European Commission hopes to circumvent this arrangement, and charge a tax on turnover based on where the users (or customers) are based. BBC News has more:

Big technology firms face paying more tax under plans announced by the European Commission.

It said companies with significant online revenues should pay a 3% tax on turnover for various online services, bringing in an estimated €5bn (£4.4bn).

The proposal would affect firms such as Facebook and Google with global annual revenues above €750m and taxable EU revenue above €50m.

The move follows criticism that tech giants pay too little tax in Europe.

EU economics affairs commissioner Pierre Moscovici said the "current legal vacuum is creating a serious shortfall in the public revenue of our member states".

Read more here.

 

[Abraham Andres Luna]

Trump said that tax breaks would create jobs, but those big companies that got the tax breaks instead paid investors. So where is the benefit in that?

 

[Becky]

Trump said that tax breaks would create jobs, but those big companies that got the tax breaks instead paid investors. So where is the benefit in that?

Well let's hope that the big tech companies don't do the opposite if this tax goes ahead - ie work their employers harder rather than let shareholders take the hit.