Row over 'Google tax' needs Europe-wide solution

The political row over the "Google tax" needs a Europe-wide solution, according to Catherine Stihler.
The political row over the "Google tax" needs a Europe-wide solution, according to Catherine Stihler.
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The row between the US, UK and France over the "Google tax" needs resolved at a Europe-wide level to prevent countries "being picked off one by one", according to a data organisation.

The Open Knowledge Foundation said that the threats by Donald Trump to introduce import taxes on French goods, in retaliation for its digital services tax, could escalate if a joint way forward is not found.

Former Scottish Labour MEP, Catherine Stihler, now chief executive of the Foundation, said the solution to the row was Europe-wide action to prevent countries being "picked off one by one".

READ MORE: Will Brexit Britain be able to tax tech giants if the EU does?
She added: “With new rules required to make the digital age fairer, countries like the UK and France are rightly looking at digital service taxes. It’s important that we build a fair, free and open future, which offers both the freedom of enterprise and the opportunity of empowerment.

“But piecemeal action by individual countries will allow them to be picked off one-by-one by the US, which is why a Europe-wide solution is required.

"I urge the new European Commission president Ursula von der Leyen to prioritise this, and to work with non-EU countries as well to take collective action to build a fairer digital future.”

Concerns have been raised about the tax paid by multinational companies in some countries, as despite making large revenues, due to the way profits can be reported in lower tax jurisdictions they have been allegedly paying too little. A multilateral solution is being sought but some countries, including the UK, are introducing interim taxes.

The proposals are fiercely opposed by the US, any country taking unilateral action risks retaliatory tariffs.

Donald Trump has said he would apply up to 100 per cent tariffs on $2.4billion worth of French goods, including cheese, champagne and handbags as the new tax would affect some of the biggest American firms such as Google, Facebook and Amazon.

Emmanuel Macron wants to introduce a three per cent digital tax on any company with revenue of more than £670m, of which at least £21.8m is generated in France.

Despite Trump's threat, Boris Johnson has also vowed to press ahead with a similar two per cent tax in the UK from April next year while the Labour Party has promised a tax on ‘multinationals’.

READ MORE: Comment: Growing ‘likes’ for higher taxation of tech giants
Mr Johnson has said: "On the digital services tax, I do think we need to look at the operation of the big digital companies and the huge revenues they have in this country and the amount of tax that they pay. We need to sort that out. They need to make a fairer contribution."

Today Frances O'Grady, of the TUC, said there was "popular pressure on government of all stripes" to ensure large multinationals were "paying their whack".

She added: "It's not just about tax, but about workers rights. I was with GMB outside Amazon headquarters protesting about treatment of workers there and that's part of a global campaign. We're seeing more and more people concerned that we've got corporate parasites going round the world, making money and not contributing treating their workers in a pretty shoddy fashion."