The European Commission has written a draft proposal, according to Reuters news agency, in which the revenues of major tech companies such as Facebook, Google, Amazon, Airbnb and Uber will be taxed in part based on where their users are located.
This would be an income tax with a rate of between 1 and 5 percent, whereby this tax is no longer based on the country in which the company’s head office is located. With this, the European Commission is trying to ensure that large tech companies pay more tax in total and are less likely to choose countries with low taxes. Reuters reports that it has had access to the draft proposal.
It will apply to companies with a worldwide turnover of more than 750 million euros, whereby a ‘digital turnover threshold’ of 10 million euros per year must be reached in the European Union. Streaming services such as Netflix, online gaming services and cloud services would be exempt from the tax.
The final proposal should be published sometime in March. Changes can still be made and all EU member states must eventually agree to them. It would be a temporary tax measure that will be introduced until there is a final proposal for a fair form of ‘digital taxation’.