UPDATE 1-Spain moves forwards on taxing web giants' local revenues

The Spanish government has sent a bill to parliament proposing to tax revenues booked by web giants such as Google, Amazon, and Facebook in Spain, budget minister Maria Jesus Montero said on Tuesday. The government proposes to levy a 3% tax on large web companies that generate global revenues of more than 750 million euros ($811.05 million) per year and more than 3 million euros in Spain, Montero said during the weekly press conference she holds after cabinet meetings.

She said the affected companies will have to make the first tax payment in late 2020, adding the delay will allow for international negotiations within the G20 and the OECD. The tax, which should bring in nearly 1 billion euros a year for state coffers, has long formed part of the ruling Socialist Party's electoral program.

EU politicians, seeking funds to tackle climate change and diminish wealth differences across the 27-nation bloc, are angry that a company such as Google, with an annual revenue of more than $160 billion, has been enjoying an effective tax rate in the single digits on its non-U.S. profits. However, opposition from the United States, where many of the tech giants are based, has stymied progress on a coordinated global tax, prompting some countries to introduce their own digital levies.

Such moves have triggered threats of retaliation, via trade tariffs, from Washington. France has postponed the enforcement of its planned tax to December as it expects negotiations at the Organisation for Economic Cooperation and Development (OECD) will produce a similar tax to be introduced across other rich countries, including the United States.

Montero downplayed the potential for retaliatory measures, describing Spain's relationship with the United States as "fluid" and noting that Washington is aware of the plans to push ahead with the tax. The cabinet also on Tuesday approved a bill taxing financial transactions at a 0.2 percent rate, potentially earning the government 850 million euros, Montero said.

The new tax will be levied on transactions of shares of listed companies with a market cap higher than 1 billion euros. There are about 60 such companies in Spain, according to data from Refinitiv.