The European Union has vowed it will take action regarding the implementation of a new ‘digital tax’ aimed at major technology leaders such as Facebook, Google and Amazon.
European industry policy chief, Thierry Breton, has declared that the European Union will take action if the OECD fail to find a resolution for taxation on digital companies.
In October 2019, the OECD proposed a global shake-up of corporation tax, which would see them overturn century-old rules that allow companies to shift profits around the world as part of their efforts to minimise their tax bills.
Technology conglomerates such as Facebook, Amazon, Apple, Neflix and Google were the enterprises that the OECD had planned to target with the introduction of this new ‘digital tax’.
The primary objective of the OECD was to establish a new and stable international corporate tax system, due to the fact that the current rules which date back to the 1920’s had become obsolete – and no longer provided a fair allocation of taxing rights in what had become an increasingly globalised world.
However, with OECD discussions appearing to have hit the skids in relation to the new digital tax, the European Union has said it will take up the mantle if the OECD fail to deliver.
“I do not know any optional voluntary tax. On the big digital players, this is obviously not an option. If it cannot be reached, then we would take up the issue at the level of the European Commission,” said Breton.
In addition to this, Breton said that that European countries that had failed to agree on a digital tax earlier were now on the same line.
When the initial announcement was made by the OECD in 2019, the proposals were robustly supported by global business and tax experts. The EU has support for this digital tax as many commentators believe that these large tech behemoths are not paying their fair share in taxes.