European Commission President Jose Barroso promoted his plan for squeezing more revenue from
technology companies, foreshadowing a possible clash on the
proposal at a summit beginning tomorrow.
Barroso wants Internet-based companies such as Amazon.com
Inc. (AMZN) to contribute more to state coffers weakened by a sluggish
European economy and the euro-area debt crisis.
"There are some specific challenges which are posed by new
digital business models which existing tax policies may not
fully address,” Barroso told the European Parliament in
Strasbourg, France, today. "The commission is actively working
on a series of measures to fight against tax evasion in
The initiative threatens to spark fresh divisions among the
European Union’s 28 national governments over the bloc’s role in
tax policy. Taxation is one of the most politically charged and
slow-moving areas of EU policy, requiring unanimous support
among member nations for any common legislation.
A French-led group has questioned whether big companies
such as Apple Inc. (AAPL) and Google Inc. (GOOG) avoid paying hundreds of
millions of euros in taxes through loopholes created by
differing fiscal regimes. Countries including Ireland have
rejected any EU encroachment on their right to set tax rates.
The commission’s plan is "an opportunity to start and
foster the debate on setting up a level playing field”
Catherine Trautmann, a French member of the EU Parliament and a
former culture minister for the country, said by e-mail.
At their Brussels meeting, EU leaders will consider taxes
as part of a discussion on the digital economy. An Oct. 21 draft
of the summit conclusions said "the ongoing work to tackle tax
evasion, tax fraud, aggressive tax planning, tax-base erosion
and profit shifting is also important for the digital economy.”
This article first appeared in bloomberg.com.