Pixel Envy

Written by Nick Heer.

European Union Plans to Tax Tech Giants on Local Revenue

Romain Dillet, TechCrunch:

Google, Amazon, Apple and Facebook have all faced different issues when it comes to tax optimizations. They’ve been routing their revenue through Ireland, Luxembourg, the Netherlands and other countries with a low corporate tax. Sometimes the money end up in Bermuda or the tiny island of Jersey.


That’s why Europe’s economy ministers wanted to find a way to tax them properly that is easy to implement. And Le Maire confirmed that Europe will look at the overall revenue of tech giants in each country and tax them based on that figure.

This makes complete sense to me. As Tim Cook once wrote:

Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created.

This is a tax that will be assessed in each country based on companies’ earnings in each country — that seems fair enough. What’s strange, though, is that the original article off which TechCrunch’s report is based indicates that this is a tax specifically on tech companies. Perhaps it’s just a lack of context created by a poor automatic translation, but that seems silly to me. As virtually all multinational companies practice various forms of tax avoidance, why not apply this strategy to all companies operating across the E.U.?