Europe expects to escape U.S. metal tariffs

Europe Just Dropped a Major Tax Bombshell to Get US Tech Giants to Pay Up

Europe Just Dropped a Major Tax Bombshell to Get US Tech Giants to Pay Up

"We need to urgently bring our tax rules into the 21st century by putting in place a new comprehensive and future-proof solution".

The European Commission on Wednesday proposed rules to make digital companies pay more tax, with USA tech giants such as Google, Facebook and Amazon set to foot a large chunk of a potential 5 billion euro bill. Digital companies would fall into the net if they make €7 million or more each year in the relevant country. It would cover companies that have annual worldwide total revenue exceeding 750 million euros and total taxable annual revenue from offering digital services in the European Union of more than 50 million euros.

In a statement, the Commission said that current tax rules were not created to cater for social media companies, collaborative platforms and online content providers who are now global, virtual or have little or no physical presence.

The Commission said that top digital firms, whose average revenue growth of 14 percent far exceeded that of other multinationals, faced an effective tax rate of 9.5 percent, less than half the level of traditional companies.

EU Economics Commissioner Pierre Moscovici brushed off accusations that he was going after rich American tech companies to enrich EU coffers and France, Germany, Italy, Britain and Spain welcomed the proposals in a joint statement.

Large EU states have accused the tech firms of paying too little tax in the bloc by routing some of their profits to low-tax member states such as Ireland and Luxembourg.

But the 28 European Union nations, which must endorse the plan, are divided and it might never see the light of day.

European heads of state will still discuss the issue at today's European Council meeting in Brussels.

The European Commission said the new system "secures a real link between where digital profits are made and where they are taxed".

"We both know what the problem is", Altmaier said, pointing the finger instead at China.

USÂ President Donald Trump announced on March 8 that global tariffs of 25% on foreign steel and 10% on aluminium imports would be imposed within 15 days, triggering outrage and a flurry of diplomatic efforts by the European Union and others to secure exemptions.

But the Computer and Communications Industry Association immediately branded the scheme "discriminatory and harmful".

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. These are bad times for globalization: China has already announced that re will be reprisals after United States measures, and Europe is on sidelines, but it shoots on or flanks, with digital rate destined in part to technological multinationals American or ads in Berlin of fines to companies that breach laws of protection of data: Facebook and case Cambridge Analytica.

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