Spain plans 3 pct digital tax on large tech companies

The Spanish government approved on Friday a draft law that would tax large companies 3 percent of their digital revenue, bringing an estimated 1.2 billion euros ($1.37 billion) to state coffers each year, cabinet spokeswoman Isabel Celaa said.

Spain, along with Italy, Britain and several other European Union countries, has been readying national digital tax plans while the bloc is still at loggerheads on an EU-wide levy.

It is designed to prevent big companies, such as Amazon , Google, Facebook and Uber, from averting tax by routing their profits to the bloc's low-tax states.

Celaa said the tax bill for companies with revenues of more than 700 million euros globally and at least 3 million euros in Spain, was in line with the European Union proposals on the matter.

The cabinet also approved a bill taxing financial transactions at a 0.2 percent rate, potentially earning the government 850 million euros for pensions and social security , Celaa said.

The expected fiscal revenue is included in Spain's draft budget for this year, which the minority Socialist government presented on Monday, although the bills still face parliament discussions that could take several months.

The European Commission last March proposed a 3 percent levy on the digital turnover of large online tech firms to address low taxation.

Most EU countries support the EU-wide tax, but it has so far been derailed by fierce opposition from countries, such as Ireland, that fear losing revenue. ($1 = 0.8789 euros) (Reporting By Jose Elias Rodriguez, writing by Andrei Khalip Editing by Louise Heavens)