EU divided on how to tax internet firms

EU countries have signaled their willingness to tax internet firms more, but are divided on how to do it.

At a meeting in Tallinn on Saturday (16 September), EU finance ministers have agreed to "move forward swiftly" and design possible mechanism by the end of the year - writes euobserver.com.

But as two different proposals have garnered different levels of supports, a handful of countries have expressed doubts about the whole idea.

"I hope it's not another FTT," Malta's Edward Scicluna told journalists, referring to the financial transaction tax, which was a plan pushed by ten countries and has been stuck in discussions.

"To have a different basis for taxation is a very complicated issue, Luxembourg's Pierre Gramegna said, adding that the EU would also need to "convince the G20 to do the same".

He insisted that the issue should be taken "globally rather than partially", because it involves the US and China.

Other countries like Ireland, the UK, Denmark, Sweden or the Czech Republic are also wary of a new mechanisms to tax internet companies.

"It's true that different thoughts were poised," admitted Estonia's Toomas Toniste, who chaired the meeting. But he insisted that he "couldn't hear any voices being against this approach that we shouldn't improve efficiency and find common solutions."

Estonia, which holds the rotating EU presidency, has proposed a plan to tax profits on internet companies where they are made, rather than where the companies are registered. It said that more than 20 countries have backed the plan.

Tech giants - such as Google, Apple or Facebook - currently pay very small amounts of tax in countries with low tax rates, in which they register a large part of their business operations.

The other proposal on the table was put forward by France, Germany, Italy and Spain last week, with the idea to tax turnover of companies in the countries where they make their revenues.

In Tallinn, the four countries were joined by six others: Austria, Bulgaria, Greece, Portugal, Romania, and Slovenia.

In a common letter, they argued that "economic efficiency is at stake, as well as tax fairness and sovereignty."

While taxing profits and turnover appear to be rival ideas, ministers are considering them as two complementary solutions in time, with the turnover taxation being a temporary solution.

"Proponents of a quick fix are also the supporters of the Estonian, the long term solution, and they are ready to abandon the quick fix once it's no longer needed," noted Dmitri Jegorov, the Estonian deputy secretary-general for tax and customs policy.

Ministers discussed the possibility of using the common corporate tax base (CCTB) and the common consolidated corporate tax base (CCCTB), which are two schemes to harmonise tax rules between EU countries, as a way of introducing a new tax on internet companies.

But both the CCTB and CCCTB are still being discussed by member states, with countries such as Malta, Ireland and Luxembourg wary of reducing the attractiveness of their tax systems.

In a statement after their meeting, ministers said that they agreed to "reach a common understanding" by December.

"We have to move quickly and in a determined manner," Estonia's Toniste insisted.

Read also more news of Tallinn here.

euobserver
taxinternetfirms Estonia
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
2 views in january
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Society
TALLINN – Russia is seeking integration in Estonia only in words, Kalev Stoicescu, researcher at the International Center for Defense and Security (ICDS) who is running on the ticket of the Estonia 200 party in the March 3 general elections, said on Wednesday commenting on the words said on the subject by Russian Foreign Minister Sergey Lavrov.  "Russia is the only neighboring state which does not wish -- due to its own interests -- progress in integration...
Politics
Former top centrist Evelyn Sepp admitted that she donated money the origin of which was unknown to her to the Center Party in 2006. The former politician claimed other members also engaged in the practice but refused to name names. Sepp’s confession on ETV investigative journalism program «Pealtnägija» does not come as a total bombshell. She first said that such covert funding of parties is a widespread practice in the aftermath of the Silvergate scandal i...
Society
"In addition to our ongoing programme of passenger vessel renovations, we are also continuing to upgrade and modernise our cargo vessels to ensure that we continue to develop this important part of our business," he noted, adding that the relocation of the company's Estonia-Finland cargo route to Muuga on the Estonian side in October 2017 and the launch of the Smart Port solution in Tallinn's Old City Harbour in spring 2018 both contributed to improved ser...
Society
During the final week of 2018, a total of 2,524 patients with viral upper respiratory infections sought medical attention, 47.5% of whom were children. A total of 210 cases of influenza were laboratory confirmed, nearly twice as many as during the week before, according to Health Board data. Over the past two weeks, the number of flu cases has quadrupled. The majority of these cases were laboratory confirmed at emergency medical departments, from which pat...
Society
I actually think that B1 is too low of a bar for attaining citizenship. You still can't participate in Estonian society on anything other than a superficial level as noted above, so I'm not sure how you can constitute a "citizen" on that basis. Naturally there has to be a high degree of arbitrariness, and that's precisely the point — whilst B1 level might be sufficient in German or French (I understand that it is the benchmark level when applying for citiz...
Society
Following a white Christmas throughout most of Estonia, Wednesday will see sleet and even rain in parts of the country, and temperatures hovering around the freezing point will means slippery road conditions. Early Wednesday morning, many major highways were salted or wet, but some patches were still icy, the Estonian Road Administration said. Eastern parts of the country will see scattered rain or sleet. Temperatures throughout the day will remain around...
Society
Last weekend, Christmas Eve as well as Christmas Day and Boxing Day still ahead means that most chemist's shops are closed for five days in a row. Tallinners can still get hold of prescription as well as over-the-counter drugs in the 5 Tõnismägi St and 19 Vikerlase St shops. As doctors' practices are closed for the holidays as well, people will have to turn to the emergency room of a nearby hospital in case of any more serious health problems. In Tallinn,...
Society
Irene Ilves, the mother of former President Toomas Hendrik Ilves, died on Tuesday aged 91. Irene Ilves was born on 6 January 1927. An Estonian refugee, she raised her family in New Jersey, on the US East Coast. She is survived by two sons, Andres Eerik and Toomas Hendrik, and four grandchildren, Juulia Kristiine, Luukas Kristjan, Kadri Keiu and Hans Hendrik, Mr Ilves wrote on social media on Wednesday, adding that she will be very missed by family and frie...
Society
Emergency services were called out on Wednesday morning after a man fell through ice at Lake Pühajärv, in South Estonia. The call was received by the Rescue Board at a little after 9.30, though by the time emergency personnel reached the scene, the man, who had walked on to the lake ice to go fishing, had extricated himself and reached dry land. The man stated that he had broken through the ice several times during his ordeal, after venturing about 50 m fr...