EU FinMins Push For Web Tax; Back Estonian Presidency Request

By Silvia Marchetti

     ROME (MNI) - Finance ministers from Italy, Germany, France and Spain have

officially endorsed the adoption of a European level web tax to crackdown on

internet giants operating across the EU, with a tax to be discussed at an

informal meeting in Tallinn, Estonia, later this week under the Estonian

presidency. 

     In a letter jointly signed by Italy's Pier Carlo Padoan, Germany's Wolfgang

Schauble, Spain's Luis De Guindos and France's Bruno Le Maire, forwarded to the

European commission over the weekend, the finance ministers of the EU's four

leading members call for an urgent "equalisation tax on the turnover generated

in Europe by the digital companies".

     The statement is the first official endorsement of a web tax, long under

discussion and now backed by the Estonian EU presidency which wants a shared

document by December. 

     The move by major EU peers makes this all the more likely and "concrete"

that the EU could now take effective steps.

     "Being able to appropriately tax the companies operating in the digital

economy is a major challenge for the European Union," state the four ministers

in the letter. 

     Italian Treasury sources told MNI that the joint initiative was spearheaded

by Rome's government to speed-up implementation of a framework web tax. Italy

has been cracking down lately on web giants, sanctioning, among others, Apple

and Google. 

     "We should no longer accept that these companies do business in Europe

while paying minimal amounts of tax to our treasuries. Economic efficiency is at

stake, as well as tax fairness and sovereignty," argue the finance ministers. 

     The ministers called on the Commission "to explore EU law compatible

options and propose any effective solutions based on the concept of establishing

a so-called "equalisation tax" on the turnover generated in Europe by the

digital companies. The amounts raised would aim to reflect some of what these

companies should be paying in terms of corporate tax."

     "This proposal is practical. It will demonstrate our commitment to

appropriately tax the companies of the digital economy in a way that reflects

their genuine activity in the EU," adds the letter. 

     The Tallinn summit discussion paper, obtained by MNI, states that

international rules on taxation are 'outdated' and 'cannot cope with the

challenges of the digitalisation of the economy'.

     The fact that business can only be taxed where they have a 'physical

presence' is creating massive distortions, it adds.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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