Europe cracks down on tech giants

The European Commission is looking at making major technology firms pay more tax.

In the newly announced plans, the European Commission said that there was a legal vacuum “creating a serious shortfall in the public revenue of member states”, and that a three per cent tax should be levied against the turnover on a range of online services.

The move is estimated to raise an extra £4.4 billion and is a response to criticism that the big tech companies are not paying enough tax in Europe.

The EU economics affairs commissioner, Pierre Moscovici, was keen to stress that it was neither an attack on the US or Google, Apple, Facebook and Amazon (GAFA).

The tech giants responded by accusing the proposals as being “populist and flawed”.

The new tax would work by targeting online revenues made from advertising on social media or in search engines, along with other sources of income, such as online trading or the sale of user data. The move would require the backing of all member states.

Mr Moscovici is keen to get an agreement before the end of year and hopes to discuss the measure s with the UK Prime Minister at the forthcoming EU summit.

There have been some voices claiming that the EU commissioner’s aim of getting the full blessing of European Union member states in the timescale set down is overly-ambitious. But he counters that by stating voters are eager to see the big digital companies paying their fair share of tax and that the plans, as laid out, are a way of getting them to do so.

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