Large companies with significant digital revenues in the European Union such as Apple, Uber, Google and Facebook could face a three percent tax on their turnover under a draft proposal by the European Commission.
The tax, if backed by EU states and lawmakers, would only apply to large firms with annual worldwide revenues above 750 million euros ($924 million) and annual ?taxable? revenues above 50 million euro in the EU. The threshold for EU revenues has been raised from 10 million euro initially foreseen to exempt smaller companies and emerging start-ups from the tax.
Big tech firms have been accused by large EU states of paying too little tax in the bloc by re-routing some of their profits to low-tax member states like Ireland and Luxembourg.
Services that will be taxed are digital advertising, which would capture both providers of users? data like Google, and companies offering ad space on their websites, like popular social media such as Facebook.
The tax would also be levied on online platforms offering ?intermediation services?, a concept under which the Commission includes gig economy firms such as Airbnb and Uber. Digital marketplaces, including Amazon, would also be within the scope of the levy.
Companies with thinner margins, like Amazon, which often operate at a loss would be stricken by a tax on turnover, whereas they are mostly exempt from taxes on profits.
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