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World

EU to Seek Higher Digital Taxes on U.S. Giants 

The view is that digital multinationals can play member states against each other to get the best tax deal

French President Emmanuel Macron (L) is greeted by Estonian Prime Minister Juri Ratas during arrivals for an EU Digital Summit in Tallinn, Estonia on Friday, Sept. 29, 2017, photo: AP/Virginia Mayo
2 weeks ago

TALLINN – There’s a groundswell of support in the European Union to make sure that digital U.S. giants pay more taxes on their lucrative business in Europe, French President Emmanuel Macron said Friday.

He said he already counted 19 of 28 nations in support of plans for continent-wide fiscal rules on taxing major internet companies. Ireland disagreed with the proposal and said many Nordic countries had joined it in opposition.

The issue came to a head last year when the EU ordered Ireland to collect a record 13 billion euros ($15.3 billion) in taxes from Apple Inc., arguing that it had profited from a system allowing it to escape almost all taxes the EU felt were due.

“Today the market is dysfunctional. It is not normal that companies make excessive profits and pay nothing in taxes,” Macron said, painting a situation where the giants of industry were able to profit in Europe and small startups suffered because of it.


The plan for a tax system that should hit U.S. tech companies harder will be coming up at EU ministerial meetings later this fall and EU Commission President Jean-Claude Juncker said he was convinced a deal would emerge.

The view is that digital multinationals can play member states against each other to get the best tax deal, leaving them with huge profits and extremely low taxes.

“We are in a tough situation because of the competition between European nations on this. It is a schizophrenic situation and not common sense,” said Belgian Prime Minister Charles Michel.

“Within a short timeframe, it profits them, but it is a short-term vision. If we need a future strategy, we need to look at more harmonization,” he said.


Prime Minister Leo Varadkar of Ireland, which is contesting the Apple decision in court, said more taxes were not the answer for the digital challenges facing the continent.

“If you want Europe to become a digital leader, the solution is not more taxes and more regulation. It is actually the opposite,” Varadkar said.

“People bemoan the fact that there is no European Google, no European Facebook, that there is no European LinkedIn,” Varadkar said. “If you want those things in Europe and you want those type of companies to come to generate in Europe, it is not through heavy taxes and high regulation.”

RAF CASERT

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