The finance ministers of Germany, France, Italy and Spain have made a joint proposal to combat tax avoidance of Apple, Google, Amazon and other large digital companies. Because companies in the digital world can easily shift their profits to low-tax countries, in the future, internet companies are expected to pay taxes on their turnover. This would be a paradigm shift from the taxation of profits to the taxation of turnover. As of Friday, EU finance ministers meet in Tallinn to discuss the proposal.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The initiative to tax Apple & Co. is overdue. Instead of parking their billions in profits in tax havens, internet giants must also make their contribution to the financing of the community in Europe. The unfair competition between internet giants and the local economy undermines the European internal market.
The new idea of the finance ministers, however, distracts from the real problem. Also the new proposal needs unanimity in the Council of Member States, which is hardly to be expected. Therefore, Finance Minister Schäuble and his colleagues have to give up their opposition to European majority decisions in tax matters. Otherwise the new proposal remains an election-campaign gag.
The ministers of finance which are willing to act should invite the Commission to submit a legislative proposal under the majority procedure as foreseen in Article 116 of the EU Treaty. Tax dumping can already now be stopped by majority voting. Currently, several proposals for combating tax avoidance in the EU are on hold because they are blocked by tax havens in the EU.
We must put an end to the patchwork of tax legislation in the EU: the common consolidated corporate tax base and a minimum rate for corporate taxation in the EU must also be placed on the track of majority decisions.“
The proposal for the taxation of the digital economy is presented in a memo by the four EU finance ministers: