EU finance ministers divided on taxing the Internet industry

At a meeting in Tallinn, Estonia, EU finance ministers discussed the recently proposed plans by France, Germany, Italy, and Spain to tax Internet companies on their revenue, rather than their profit. Although there was agreement on the need to ‘move forward swiftly‘, there was division among the EU on the proposal. About a third of the EU member states backed the proposal, which they hoped would enhance ‘economic efficiency’, ‘tax fairness and sovereignty‘. Yet, the plan also received extensive criticism. Denmark pointed out that it might push innovative companies away from Europe, and Luxembourg added that ‘it doesn’t make sense’ to move without a global agreement. Some countries identified technical and legal challenges, and others feared it would divide the EU and cause friction with the USA. Generally, the plan was seen as a ‘quick fix’ for the short term, while in the meantime, more structural solutions should be found. One of these long-term solutions was proposed by Estonia and would ‘permit states to tax companies where they have a digital, and not just a physical, presence‘.