Europe Digital Tax in doubt as Malta questions year-end deadline
• EU finance ministers discussed digital tax plans over weekend • Countries including France, Austria seek deal by end of year
Malta’s finance chief poured cold water over European efforts to strike a deal on taxing digital companies by the end of the year, saying such a levy should be agreed at a global level Nour Al Ali and Viktoria Dendrinou wrote on Bloomberg.
Finance Minister Edward Scicluna said in an interview with Bloomberg that the complexity of a tax on tech giants requires time to address and would be best dealt with at an international, multilateral body in the same way as other worldwide corporate tax rules.
“Why do we want to rush,” he said, adding that he doubts a deal could be struck by the end of the year.
His comments come after European Union finance ministers held talks over the weekend on a proposal aimed at ensuring technology giants pay their fair share in tax, amid growing public anger that corporations benefit from an outdated framework that struggles to deal with online businesses.
They underscore the resistance among certain nations, who would rather wait for an international approach rather than a quick EU-only fix.
Countries led by France are pushing for a rapid introduction of an EU tax on revenues of large tech firms such as Amazon.com Inc. and Facebook Inc. until the world’s wealthiest nations can agree on a global system. French Finance Minister Bruno Le Maire has been raising pressure on his European peers to move ahead with the levy, warning that voters would punish them at EU elections in May if they don’t act. Europeans can’t understand why tech giants pay lower tax rates than small companies based on European soil, he said.
But other nations are worried pushing ahead with such a tax -- which would target some of the biggest US companies -- could exacerbate trans-Atlantic trade tensions. Germany, which exports more to the US than any other EU country, may stand to lose the most in the case of an escalating trade war.
Scicluna echoed these concerns, saying that the digital proposal could complicate matters politically between the EU and the US, “exacerbating the issue of the trade war.”
“This is not just Ireland or Luxembourg or Malta,” he said. “Half of the council, especially the northern countries, understand that it’s foolish to go for a quick fix tax in a complicated area like that.”