A European Union plan to raise more tax from digital multinationals faced the first signs of scepticism on Saturday, as smaller members of the bloc warned about the economic impact from such a move.
France wants to tax companies like Google and Facebook on their turnover, rather than profits, to increase revenue from global online groups, accused of paying too little in Europe.
More than a third of the EU’s 28 members backed Paris on Saturday at a meeting of EU finance ministers in Tallinn, the Estonian capital, but the move needs the agreement of all member states to reduce the risk of legal challenges.
“We should be very careful,” Denmark’s finance minister Kristian Jensen said, warning of the risks of pushing innovative companies away from Europe.
His remarks were echoed by Luxembourg’s finance minister Pierre Gramegna, who said any EU solution would need global backing to avoid damaging Europe’s competitiveness. “It does not make any sense” for Europe to move without a global agreement, he said.
But the objective at this stage is to reach an agreement among all members by the end of the year, followed by legislative proposals next spring, he added. The commission will outline other legal options to tax the digital economy in a paper in the coming days.
Reference: Reuters
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