Internet Giants To Pay More Tax In EU Countries

The European Union is to revamp its tax system in a way that it would become much harder for internet giants like Amazon and Facebook to avoid taxes by declaring earnings in countries that have lower rates.

French finance minister Bruno Le Maire said Sunday that in the new system, the companies will have to pay two to six percent of tax in every country they operate.

“The range will be from two to six percent; but closer to two than to six,” said Le Maire in an interview.

According to the current EU taxation mechanism, American giants like Google, Amazon, Facebook and Apple can report their income from across the bloc in any member state. In most cases the choice is a low-tax nation like Ireland, the Netherlands or Luxembourg.

Le Maire said the new tax scheme would not allow those companies to continue with their tax-avoidance policies which effectively deprived many other countries in the EU from a share of their revenues.

“The heads of these companies know themselves that this system can't continue,” Le Maire said.

The European Commission has indicated that it would introduce an overhaul of its tax rules by the end of March. Many expect the new regulations could generate billions of euros for EU governments while it would give a better competitive advantage to smaller companies.

According to a 2015 estimate by the Organization for Economic Cooperation and Development, governments around the world lose as much as $240 billion (195 billion euros) a year over tax-avoidance strategies of big companies like those Americans dominating the internet.

To avoid major losses as a result of the European tax revamp, American companies have announced that they would pay more in each country where they operate. Amazon said last month that it would start declaring all its earnings in France after settling a major tax claim in the country.


(PRESSTV)




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