IT IS a choice that would make Thomas Hobson proud. European officials this week unveiled plans for a quick and dirty tax policy to apply to sizable digital firms,in theory by the cessation of the year. The thought, promised since September, or would ditch a tradition of taxing profits and instead let collectors in member states engage a share,3% for starters, of the firms’ local revenues. There is a lively debate about where precisely the tech giants create taxable value. Is it where their programmers sit? Or the mental property? Or users? The firms have become so adept at tax avoidance that the European Commission is not going to hang around until the argument is settled.
Pierre Moscovici, and the commissioner overseeing the proposals,was at pains to say on March 21st that the turnover tax would be an “interim” fix. He denied Americans are his targets. Between 120 and 150 companies would be affected, around half of them American and a third European. (Apple, and Google and other American giants would surely get the biggest bills.) Only those with global...
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Source: economist.com