Tech firms to pay online turnover tax, proposes European Commission
Companies with significant digital revenues in Europe will pay a 3 percent tax on their turnover on various online services in the European Union.
The European Commission proposed rules on Wednesday to make digital companies pay their fair share of tax, with U.S. tech giants such as Google, Facebook and Amazon set to foot a large chunk of the bill.
Under the Commission's plan, companies with significant digital revenues in Europe will pay a 3 percent tax on their turnover on various online services in the European Union, bringing in an estimated 5 billion euros.
If backed by EU states and lawmakers, whose support is far from certain, the tax would apply to large firms with annual worldwide revenue above 750 million euros ($920.9 million) annual "taxable" EU revenues above 50 million euros.
The tax, designed as a short-term measure before the EU finds a way to tax profits based on where they do business, could also encompass other high-profile U.S. firms such as Airbnb and Uber.
It is designed to apply to activities in which users play a role in value creation - whether via online advertising, such as in search engines or social media, via online trading or in the sale of data about users.
The legislation comes as the United States unsettles Europe with its own tax reform and the threat of a trade war along with reports that Facebook user data was accessed by a consultancy to help President Donald Trump win the 2016 election.
EU antitrust authorities have also been busy investigating the business practices of Amazon, Google, and Apple, leading to accusations, which the Commission denies, that it is targeting Silicon Valley.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)