Business

European Union unveils digital tax targeting Facebook, Google

BRUSSELS: The European Union (EU) yesterday unveiled proposals for a digital tax that targets US tech giants, heaping more problems on Facebook after revelations over misused data of 50 million users shocked the world.

The special tax is the latest measure by the 28-nation EU to rein in Silicon Valley giants and could further embitter the bad-tempered trade row pitting the EU against US President Donald Trump.

EU Economics Affairs head Pierre Moscovici presented his proposals in Brussels, aimed at recovering billions of euros from mainly US multinationals that shift earnings around Europe to pay lower tax rates.

"This current legal vacuum is creating a serious shortfall in the public revenue of our member states," said Mr Moscovici.

"We estimate this could generate at least five billion euros a year if the tax is imposed at 3 per cent."

Mr Moscovici insisted it was "not an anti-GAFA tax nor an anti-US tax", referring to the popular acronym for Google, Apple, Facebook and Amazon.

The tax follows anti-trust decisions by the EU that have cost Apple and Google billions and also caught out Amazon.

The EU tax plan will target mainly US companies with worldwide annual turnover above 750 million euros (S$1.2 billion), such as Facebook, Google, Twitter, Airbnb and Uber.- AFP

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