THE EUROPEAN UNION plans to slap technology companies with new taxes based on their revenues rather than their profits, according to Reuters.
According to the report, EU officials are working on a new tax that would see major international technology companies pay between two per cent and six per cent of their revenues in taxes.
French finance minister Bruno Maria Le recently confirmed the European Commission (EC) is looking to implement a new revenue levy on major tech firms.
However, he explained that it is likely to be closer to two per cent, at least to begin with, than six per cent. The aim is to ensure that companies such as Apple and Google pay what the EU regards as their fair share of tax throughout Europe.
"A European directive will be disclosed in the coming weeks. It will be a considerable step. The (tax rate) range is two per cent to six per cent [but] we will be closer to two per cent than six per cent," he said.
In the interview with Le Journal du Dimanche, he was asked if this tax rate was modest. He responded by claiming that it is "a starting point".
Le Maire said the tax would likely be tweaked in the future - ie: increased. "I prefer a text that will be implemented very quickly rather than endless negotiations. We will fine tune it later," he said.
After coming across a draft EC document detailing the plans, Reuters reports that officials had also been exploring a tax option that focuses on the location of companies.
But the document proposed a far smaller levy rate: between one per cent to five per cent. Just like the new plans, this previously-seen document detailed a tax based on a company's "aggregated gross revenues".
Over the past few years, US technology and internet-based companies, such as Amazon, Facebook, Apple and Google, have been heavily criticised by EU politicians for not paying what they regard as sufficient levels of tax.
Apple, for example, was in dispute for a long time with the European Union over its low corporate tax rate in Ireland, through which it legally channelled EU revenues. On top of that, the Irish government also gave the company tax relief as part of its policies to encourage inward investment.
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