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EU To Review New Digital Tax Plan From France, Germany

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EU To Review New Digital Tax Plan From France, Germany
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Last month, the European Union announced the collapse of its plans to tax internet and tech giants like Alphabet Inc.’s (NASDAQ: GOOGL) Google and Facebook, Inc. (NASDAQ: FB). The alternative included specific national initiatives. Advancements within the negotiations are slated to be discussed this week, according to a new report.

What Happened

Paris and Berlin are set to present a draft plan to enforce a 3 percent tax on revenues from ad sales in the entire digital economy, Financial Times reported. This new plan will include a more distinct and expansive digital tax plan that will affect both data sales and online platform usage.

Why It’s Important

While this proposal influences companies like Facebook and Google, certain web-based companies like Amazon.com, Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) may not endure the consequences, the report said.

“Diplomats said the focus on just advertising was designed to alleviate German concerns that its car companies could be hit by the tax. It is also an attempt to overcome staunch opposition from Nordic economies,” Financial Times reported.

What’s Next

In order for approval to occur, unanimous agreement among all EU governments is required for all tax matters. The proposed idea, referred to as the Franco-German compromise, would come into effect in 2021, but "officials said they want EU ministers to agree the measure by March 2019," according to the report.

The draft is expected to be sent for consideration Tuesday morning.

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Posted-In: EU Financial TimesNews Eurozone Rumors Markets Tech Media Best of Benzinga

 

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