EU pushes for Google, Facebook tax hike

GOOGLE and Facebook may face higher tax bills in Europe as the EU rushed Saturday to change rules so that more of Silicon Valley’s mega profits fall into public coffers.

Public anger against the billions of euros earned by online behemoths is growing louder in Europe and EU finance ministers meeting in Estonia pledged to make sure the companies pay a fairer tax.

But divisions emerged on how to go about taking on the giants, with several member states worried that a tax in Europe could push the companies to set up shop in the US or Asia.

In the digital age “the current taxation system no longer applies and that is why we have to find another solution,” said Toomas Toniste, finance minister of Estonia, which hold the EU’s sixmonth rotating presidency.

Led by France and Germany, big EU powers urged their bloc partners to explore an emergency tax so that the giants pay tax where they earn revenue, instead of on profits booked in a low-tax EU HQ of their choice, often Ireland or Luxembourg.

“We are now about 10 countries to back this idea,” said French Finance Minister Bruno Le Maire as stepped into the talks, adding that he hoped for a firm proposal by December.

“We don’t want a Europe at the heel of others,” he added.

But the road ahead will be difficult. Europe-wide tax reform is a huge headache in the European Union, requiring unanimity of all 28 states, which has proved nearly impossible on tax issues.