G20 agrees how far technology giants are from digital taxes

The tech giant has been hit again. On the 9th, Beijing time, Reuters reported that the G20 finance minister had reached a consensus on the 8th to formulate common rules to make up for the loopholes used by global technology giants such as Facebook to reduce corporate income tax. In fact, regarding the “digital tax”, the EU has tried many times. Under the leadership of France and the United Kingdom, the days of technology giants have become more and more difficult. However, the United States is still behind the support, and the differences within the EU still exist, and the digital tax distance may actually take some time.

Is it difficult

Not surprisingly, large technology companies have once again become the center of discussion. Reuters reported that the final version of the digital tax bulletin was released on Sunday. “We are pleased with the progress made in addressing the tax challenges brought about by the digitalization issue and agree to adopt a two-pillar project strategy.” In addition, the draft communiqué also mentioned that efforts will be made to submit a final report by 2020 based on a consensus-based solution.

The technology giant seems to have become the target of public criticism. According to Reuters, Facebok, Google, Amazon and other large technology companies have been criticized for the reason that no matter where they end up serving, they will choose to achieve profitability in low-tax countries, thereby reducing taxes. This practice violates the principle of fairness in the eyes of many people.

In fact, the EU has already taken the lead in launching a digital tax. In March last year, the EU finally announced the “Digital Tax” program, which mentioned the announcement of a tax on large Internet companies with annual global revenues of more than 750 million euros. But then, this program has experienced many twists and turns. Although France and Britain are firmly on the side of the EU, officials including Denmark, Sweden and Ireland have expressed opposition, saying that digital tax will reduce their competitiveness. In March of this year, the EU also had to announce a moratorium on the implementation of a unified digital tax within the EU.

Without the EU, France is ready to “single”. On May 21 this year, the French Senate just voted to pass a draft law on the digital tax to the Internet giant. According to the draft, from January 1, 2019, companies with a global digital business revenue of no less than 750 million euros and a French operating income of more than 25 million euros will be subject to a 3% digital tax. According to French Finance Minister Lemaire, the tax revenue of the digital tax in 2019 is expected to be 400 million euros, and by 2022 this figure will reach 650 million euros.


The tech giant seems to have aroused public anger. Previously, Carrefour CEO Bompard mentioned in an interview with the French “Sunday” that it is time to solve the financial inequality between the entity and the Internet. “Their goods are pouring into the market without paying VAT and almost all other taxes. This is unacceptable. At the same level of turnover, they should pay the same tax.”

According to data provided by the European Commission, traditional industry companies are required to pay an effective tax rate of 23.3%, while large technology companies tend to operate internationally, with an average tax rate of 9.5% in the EU.

Getting the bargain and not selling it is the ultimate reason for these tech giants to be eyeing. Although the EU has given the technology giant a relatively low tax rate, the latter is still the best choice, setting its European headquarters in low-tax countries such as Ireland to avoid the huge taxes paid in Europe, as Apple and Google do.

Internet analyst Yang World said that the EU is the first to tax these large technology companies, mainly because these large international Internet companies have a large amount of income in other countries in the EU, and the taxable profits brought by these incomes are also huge, but In order to reduce their tax risks, these companies reinvested profits from other countries into countries with lower tax rates, which led to the influx of money from these high-tax countries in the EU to other low-tax countries. , resulting in tax losses in some high-tax countries in the EU. However, if a digital tax is imposed, it will be equivalent to a double tax for enterprises. Naturally, it will also cause opposition from other low-tax countries in the EU, because double tax will reduce the market share of these large Internet companies in low-tax countries. The loss of technology giants.


It’s never been easy to challenge the giants, let alone challenge multiple giants at once. Reuters mentioned that the United Kingdom and France have always been countries that strongly advocate corporate taxation proposals, while the United States is the opposite. Because the United States is worried that US Internet companies are experiencing unfair treatment on the issue of vigorously promoting global corporate taxation.

In March of this year, when France prepared to tax the technology giants, it mentioned that there are about 30 target companies, most of which are American companies. According to the Parisian newspaper, the United States Google, Amazon, Facebook, Apple, Uber, Airbnb, Binker and French online advertising company Criteo are among them.

When the European Union began to introduce a digital tax last year, the United States was also considered to be the hardest hit by digital taxes. At that time, according to estimates by the European Commission, about 120-150 Internet giants would be affected by this regulation. However, it is understood that half of the companies involved are American companies. It is worth noting that while the EU announced the plan, it is catching up with the critical period before the US steel-aluminum tariffs come into force.

Today, the trade game between the United States and Europe continues, and digital taxes are still invisible. And between the US and Europe games, there may still be many obstacles to the digital tax itself. After all, for these low-tax countries, these technology giants are sucking gold weapons, and digital taxes are tantamount to cutting meat for them.

Yang World said that the EU is divided into two camps, one is a country with a relatively high tax rate, and the other is a country with a relatively low tax rate. For these two camps, there will be different opinions on the collection of digital taxes. For example, if Google earns money in a country with a high tax rate in the EU and then invests in a low-tax country, it will easily lead to dissatisfaction in countries with high tax rates. However, the double taxation may cause dissatisfaction in low-tax countries because they feel that it is difficult to introduce the giants through low-tax policies or preferential conditions to promote local economic development. They are afraid of losing the giants like Google and worrying about the influence of these giants in the local market. The layout, which in turn affects the government’s tax revenue, causes fluctuations in the local economy.

Release Date: 2019/06/10