Tougher tax rules for technology companies
The EU finance minsters continued working on their plan to tighten pan-European tax regulations for technology companies on the weekend. Under the new plan the tax to be paid by companies such as Google, Apple, Facebook and Amazon would be based not on profits but on sales, in a bid to prevent multinationals from declaring their taxes in countries with particularly low tax rates. Europe's press is enthusiastic.
A challenge for the EU
Le Soir agrees that it's high time for a reform of the tax system:
“Europe is obliged to restore a basic equilibrium between the companies installed on its territory. The fact that Google, Apple, Facebook, Amazon and the like make life easier for many of us - often at a bargain-basement price - doesn't justify them paying no taxes at all. ... To establish equality we need to overhaul our taxation systems, which aren't adapted to these 'virtual' companies. ... Consequently the task the European finance ministers will face is huge. ... Taxing the web giants is a major challenge in itself - and all the more so because Europe's credibility is at stake.”
Pay taxes where you make profits
Eesti Päevaleht also hopes that the EU finance ministers' talks will soon lead to new tax rules:
“It would be good for Estonia if a solution that can really be implemented in the years to come is found. Because up to now the Internet giants Facebook, Google, Amazon, Apple and others haven't paid their fair share of taxes in the countries where they make their profits. The international taxation regulations still work on the premise that profits can only be taxed when a company has a physical presence in a country. ... According to the proposal of the Estonian EU Council presidency, the profits made by digitally present companies would be taxed regardless of whether these companies have a physical presence in countries where they're virtually active. The problem, however, is that the proposal could be blocked by those countries that benefit from this situation.”
Ireland must not remain a tax haven
EU Commission President Juncker was right to put low-tax countries like Ireland under pressure in his State of the Union speech, The Irish Times believes:
“The impatience with global corporations paying so little tax drives current demands for turnover taxes and tighter regulation. ... Ireland’s official trepidation over [Juncker's proposals] is shortsighted. This country is relatively undertaxed overall, has a narrow tax base and needs to develop its economic model to meet the demands of a more modern and prosperous society.”
Finance ministers must reckon with resistance
The plans of several EU finance ministers to tax IT companies in countries where they only have a virtual presence will be difficult to implement, Der Standard suspects:
“The danger is great that the finance ministers are putting an important issue on their banners for PR reasons, but that in the end nothing will come of the whole thing. That's what happened with the financial transaction tax, which was ready to be introduced but ended up being torpedoed anyway. … Then there's the fact that in international tax law nothing happens without a consensus and countries like Ireland have no reason to budge and give other states a piece of their tax pie. The biggest hurdle could end up being the US. Europe is eyeing the revenues of US firms. If Washington tries to shield them we'll see how serious Berlin, Paris, Rome and Madrid really are about this.”
EU's big chance to boost its popularity
This latest battle in the EU's tax war against Apple, Google, etc. is popular with the citizens but it is unlikely to be successful, columnist Sheila Sitalsing also predicts in De Volkskrant:
“This is because a country like Ireland has little interest in torpedoing its own income model. … Or because in the Netherlands whenever there's a serious attempt to tax multinationals someone in the finance ministry goes pale and starts stammering, 'This will be catastrophic for our attractiveness as a location for companies' - after which the plan is never heard of again. … Such efforts go down very well with EU citizens, however, who take the view that the average citizen is being fleeced. 'Pick on the tax-evading big businesses instead!' they say. The EU could make itself extremely popular with this project.”