The European Commission is set to propose a new 3% tax on tech firms in a bid to bring more
The European Commission is set to propose a new 3% tax on tech firms in a bid to bring more money into the EU’s coffers.
When expanding into Europe, Silicon Valley’s companies have chosen countries with low tax rates, like Ireland, to set up their headquarters, even though they conduct business throughout the continent. To combat this, the new tax would be matched by companies’ revenue in each member state, rather than profits where they are formally based.
However, the proposal is projected to bring in a mere $6 billion in revenue—weak by the EU’s standards. Critics then argue that the tax will not seriously increase revenue nor improve the Commission’s testy relationship with Silicon Valley; Brussels fined Google a record $2.7 billion on antitrust charges last year.
For the proposal to pass, all member states will have to support it. Unsurprisingly, low-tax host states appear to be opposed. Even if the measure doesn’t succeed, expect Brussels to continue its efforts to get tech giants to pay their share within the bloc.
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