UK must not become tax haven for tech giants, Labour MEPs warn as European Parliament backs new tax on digital companies

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Britain must not become a tax haven for tech giants if it leaves the EU, Labour MEPs warned as the European Parliament this week backed Socialists and Democrats Group (S&D) proposals for a digital services tax.

The new proposals to reform corporate tax systems seek to ensure multinational companies are taxed where they create economic value, regardless of their physical presence. Labour MEPs believe international tech giants like Google, Apple, Facebook and Amazon must pay their fair share of taxes, and not continue to be able to get away with being severely under-taxed.

Though Labour MEPs and the S&D Group pushed for a rate of five per cent, the European Parliament voted for the less ambitious rate of a 3 per cent tax on turnover, and also backed for S&D proposals for with digital provider companies such as Netflix and iTunes to be covered by the digital services tax.

More than 725,000 citizens EU have signed a petition calling for tax justice, and for tech giants to pay their fair share of taxes - Amazon made almost $200 billion (£160bn) in revenue last year, yet their net tax rate was 0%.

If the UK leaves the EU under a Tory Brexit, there are fears progressive EU legislation like the digital services tax will be watered down or ditched entirely, with the UK becoming a tax haven for tech giants.

Friday, December 14, 2018

Notes to Editors:

  1. For more background on the S&D proposals for the fair taxation of digital companies, see: https://paultang.nl/wp-content/uploads/2018/12/PvdA-Digital-tax-report.pdf
  2. 2. For more information on the tax justice petition, see: https://secure.avaaz.org/campaign/en/tech_tax_104e/

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