Big companies appeal to the EU: abolish the digital tax

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Economy

Several leading European companies, including Spotify and Zalando, are appealing in an open letter to EU finance ministers to stop plans for a tax on digital services.

Discussions about increasing sales tax on multinational internet giants have dragged on for a long time within the European Union and the OECD without reaching an agreement.

The question of how and where to tax global corporations, such as American Amazon and Facebook, has long been debated. Within the European Union, many proposals have been supported, weakened and suspended, after pressure from the United States.

At the same time, France has introduced its own rules that apply to companies with revenues of more than €25m in the country and €750m globally. These companies must pay three percent of the revenue from digital services earned in France.

OECD announcement this week?

The Organization for Economic Co-operation and Development reportedly came out with a new message about its stance on a possible settlement in the region this week.

Now the directors of several of Europe’s largest companies with digital operations write, in an open letter to all EU finance ministers, that the union’s proposal for a digital tax creates instability in the international tax system and harms growth, investment, innovation and employment.

The companies stress that they support a global solution that ensures long-term stability in the international tax system.

risk of trade conflict

However, they consider themselves disproportionately affected by the digital tax, known in EU parlance as Digital Service Taxes (DST). The signatories to the letter believe that the tax will hit companies that are in the early stages of growth in particular. In addition, the risk of trade disputes will increase.

Among the signatories are representatives of the Swedish company Spotify. Other companies that have signed the letter are clothing giant Zalando, media group Schibsted, online travel agency Booking and e-commerce platform Allegro.