It is no secret that large tech companies often use various methods to lower the amount of tax they owe in different continents. This has gotten the likes of Facebook, Apple, Amazon and Google into varying degrees of trouble over here in the Europe. So with that in mind, the European Union is reportedly planning to change the way it taxes large tech companies, switching over to taxing overall revenue, rather than profits.
According to the folks over at Reuters, EU officials are working on a new proposal, which aims to charge companies between two percent and six percent of their yearly revenue in taxes. While discussions are still ongoing, French finance minister, Bruno Maria Le added that the figure is likely to be closer to two percent to begin with.
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The two percent figure has been described as “a starting point”, so it could increase over time. Currently the proposal is being drafted, so nothing is official just yet, but it looks like the EU is planning to change its corporate tax laws in the future.
European Union politicians have criticized large US-based tech firms in the past over their EU tax payments. Apple recently agreed to begin paying off €13 billion in back taxes late last year after an ongoing back and forth between the Irish government and the Union. The French government has also had a few things to say about Google’s tax paying methods.
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KitGuru Says: The EU has yet to officially bring these rules into place, but I imagine there are plenty of tech CEOs keeping an eye on this. We may even end up seeing some formal opposition to these changes.