Taxing the GAFA is necessary, but not sufficient in the long term, say S&Ds - Main contents

The European Commission has proposed to tax the revenues of giant tech companies - Google, Amazon, Facebook and Apple (GAFA) - where they are generating their revenues in Europe in a move to prevent tax avoidance.

The Socialists and Democrats in the European Parliament believe that such an initiative is necessary, but warn that only an agreement on harmonising the corporate tax system would present a lasting solution.

S&D Group spokesperson on the common consolidated corporate tax rate, Paul Tang added:

“It is welcome that the Commission now prioritises the taxation of digital tech giants, building forth on the work of the OECD and the European Parliament report on a common consolidated corporate tax base. However, the Commission proposal is an ad interim solution, that should not remove the pressure on addressing the structural problems of corporate taxation that goes beyond digital taxation alone”

“Tax avoidance may be easier for digital companies, but it is multinationals in general who do aggressive tax planning to reduce their tax contribution. This requires a more comprehensive EU tax reform in addition to the European Commission’s proposal.”

“Moreover, further steps are needed to put an end to tax competition within the EU. It is often smaller member states that take advantage of other member states by attracting a large part of their tax bases, like real tax pirates.”

“The European Parliament’s proposal for a CCCTB offers such a structural solution by addressing tax avoidance by multinationals, the issues of the digital economy and tax competition between member states as a whole. The CCCTB is the way to go forward in order to ensure a fair, modern and efficient corporate EU tax system.”