Skip to main content

Technology in Taxes: Trump's hostility toward a digital tax could unite Europe to implement one, lawmaker says

Silvia Amaro




Donald Trump Emmanuel Macron Angela Merkel
France’s President Emmanuel Macron (2nd L) and Germany’s Chancellor Angela Merkel (R) look at US President Donald Trump (front L) and Turkey’s President Recep Tayyip Erdogan (front R) walking past them during a family photo as part of the NATO summit at the Grove hotel in Watford, northeast of London on December 4, 2019.
Christian Hartman | AFP | Getty Images
Taxing tech giants has long divided policymakers, but disagreements with U.S. President Donald Trump could drive Europe to step up levies on companies like Google and Facebook, a lawmaker told CNBC.
France, Austria and Italy are among the European countries that have implemented taxes on the tech companies at a national level, but there’s been a failure at the European Union level to agree on a joint levy.
The political and economic union of 27 countries failed to reach a consensus in March 2019, when four member states vetoed a common tax. At the time, Ireland, Sweden, Denmark and Finland said there should be a broader debate outside of Europe over a digital tax, before the EU implemented its own.
However, criticism from the U.S. could push European countries to design an EU-wide digital tax, Paul Tang, a Dutch lawmaker at the European Parliament, told CNBC’s Beyond the Valley podcast.
“Trump will most likely unite Europe on this,” Tang said. “We are already in a situation where the transatlantic relation is shaky.”
The EU and the United States have clashed over trade, defense, foreign policy and much more since Trump’s arrival in the Oval Office.
“Taxation won’t make this situation easier to put it mildly,” Tang, from the Socialist group in the European Parliament, added, suggesting that the EU doesn’t have much to lose from pursuing a digital tax, even if Trump opposes it, given the state of their relationship.
The White House was not immediately available for comment when contacted by CNBC Wednesday.
In the past, Trump has attacked European governments keen to make tech giants pay higher duties. He said in 2019 that France’s digital tax was foolish and the “great American technology companies” should be taxed in their home country.
Trump also started a trade spat with France and vowed to do the same with other European countries if they taxed U.S. tech firms more. The trade row has been put on hold while an international debate over digital tax takes place at the OECD (Organization for Economic Cooperation and Development).
“There is also a growing awareness in Europe that we need to act on our own, and Trump is forcing Europe to act on its own,” Tang said. “This is not just in the area of trade and taxation, this is much broader.”
If there is no OECD agreement by the end of the year, tech giants will have to pay higher duties in some European nations, including in France, the U.K. and Italy. Meanwhile, the European Commission — the EU’s executive arm — has also said that it will look to create a common EU digital tax if no OECD deal is forged.
Jeremy Ghez, affiliate professor at H.E.C. Business School in Paris, told CNBC’s Beyond the Valley podcast that a digital tax is a good way to make the market place fairer between tech giants and more traditional, smaller businesses.
“Digital taxation is a way to fix this, because if you don’t fix this, you are likely to end up with a two-speed economy and you are likely to empower tech giants further,” he said.
Despite Trump’s fierce opposition, Ghez added that the U.S. might change its approach to digital taxation in the future.
“Down the line, many people inside the United States will understand this argument, I think, which is basically that you need to do that rebalancing act to help traditional sectors better adapt and to not empower too much one industry over the others,” he said.

Comments

Popular posts from this blog

Analysis | The Cybersecurity 202: How the shutdown could make it harder for the government to retain cybersecurity talent

By Joseph Marks 13-17 minutes THE KEY President Trump delivers an address about border security amid a partial government shutdown on Jan. 8. (Carolyn Kaster/AP) The partial government shutdown that's now in its 18th day is putting key cyber policy priorities on hold and leaving vital operations to a bare bones staff. But the far greater long-term danger may be the blow to government cyber defenders' morale, former officials warn. With the prospect of better pay and greater job security in the private sector, more government cyber operators are likely to decamp to industry, those former officials tell me, and the smartest cybersecurity graduates will look to industry rather than government to hone their skills. That’s especially dangerous, they say, considering the government’s struggle to recruit and retain skilled workers amid a nationwide shortage of cybersecurity talent. About 20 percent of staffers are furloughed at the De

Democrats call for investigation into Trump’s iPhone use after a report that China is listening:Analysis | The Daily 202 I The Washington Post.

washingtonpost.com By James Hohmann _________________________________________________________________________________ President Trump and Chinese President Xi Jinping visit the Great Hall of the People in Beijing last November. (Andrew Harnik/AP) With Breanne Deppisch and Joanie Greve THE BIG IDEA: If Democrats win the House in two weeks, it’s a safe bet that one of the oversight hearings they schedule for early next year would focus on President Trump’s use of unsecured cellphones. The matter would not likely be pursued with anywhere near the gusto that congressional Republicans investigated Hillary Clinton’s use of a private email server during her time as secretary of state. Leaders of the minority party have higher priorities . But Democratic lawmakers made clear Thursday morning that they will not ignore a New York Times report that Trump has refused to stop using iPhones in the White House, despite repeated warnings from U.S. intelligence offici

RTTNews: Morning Market Briefing.-Weekly Jobless Claims Edge Down To 444,000. May 13th 2010

Morning Market Briefing Thu May 13 09:01 2010   Commentary May 13, 2010 Stocks Poised For Lackluster Open Amid Mixed Market Sentiment - U.S. Commentary Stocks are on pace for a mixed start to Thursday's session, as a mostly upbeat jobs report continued to relieve the markets while some consternation regarding the European debt crisis remained on traders' minds. The major index futures are little changed, with the Dow futures down by 4 points. Full Article Economic News May 13, 2010 Weekly Jobless Claims Edge Down To 444,000 First-time claims for unemployment benefits showed another modest decrease in the week ended May 8th, according to a report released by the Labor Department on Thursday, although the number of claims exceeded estimates due to an upward revision to the previous week's data. Full Article May 13, 2010 Malaysia's Decade High Growth Triggers Policy Tightening Malaysia's economy grew at the fastest pace in a decade in