Germany urges global minimum tax for digital giants

This article first appeared in The Edge Financial Daily, on October 22, 2018.
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FRANKFURT: German Finance Minister Olaf Scholz said in an interview for publication yesterday he backed a global minimum fiscal regime for multinationals as Europe looks to levy tax notably on US technology giants.

“We need a minumum tax rate valid globally which no state can get out of,” Scholz, a Social Democrat in conservative Chancellor Angela Merkel’s coalition government, told the Welt am Sonntag weekly.

Europe is trying to devise a strategy to tax profits from the likes of Google, Amazon, Facebook, Apple and digital platforms such as YouTube and Airbnb which currently manage to keep fiscal exposure to a bare minimum.  

 The European Commission, the EU’s executive arm, has proposed a European tax on “big tech” with susbstantial digital revenue in Europe, based on overall revenue in Europe and not just profits.

But lead opponent Ireland says a growing number of countries are grumbling about hidden problems with the tax. Berlin worries that cranking up the ante on trade with the US by launching what Washington could see as an attack on Silicon Valley’s corporate giants may threaten German car exports. — AFP