Arising from a European Union (EU) summit in Tallinn, Estonia, Jean-Claude Juncker has said the Commission will begin taxing tech giants, including Google and Facebook, effective 2018.
“Tax has to be paid where it is due, be it offline or online. The commission will propose next year new rules on fair and effective taxation that provides legal certainty and a level playing field for all,” the European Commission Chief, Juncker said after the summit in Tallinn.
Juncker made the commitment after France President Emmanuel Macron pressed the issue at the second day of the summit, where EU leaders discussed the opportunities and dangers of the digital economy.
The push by France, which Macron said high tech companies had become the “freeloaders of the modern world,” is already being backed by powerful Germany.
So far about a dozen of the EU’s 28 member states have signed on to the idea, though many urge action to take place on a global level, such as the G20, instead of just in Europe.
Europe-wide tax reform is a huge headache in the European Union, requiring unanimity of all 28 states, which has proven nearly impossible on tax issues.
Already smaller EU states have expressed strong resistance to the idea, which they say will chase US tech giants from their shores, especially Ireland that serves as a low tax hub for Apple, Facebook and Google.
“If we want Europe to become digital leader, the solution isn’t more taxes and more regulation, it’s actually the opposite,” said Irish Prime Minister Leo Varadkar.
