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Apple may have to pay an annual lump sum to the EU in a tax compromise
Apple and other tech giants may have to pay an annual lump sum to the EU under a modified version of a digital services tax plan.
The EU hopes a revised version of earlier proposals will enable it to raise tax revenues without incurring the wrath of the White House …
There has long been debate within EU countries about taxes on digital services, with Apple examples including iCloud, Apple Music, Apple TV, Apple Creator Studio, and more.
Some point to the significant revenues earned from selling subscription services to EU citizens without necessarily paying any tax in Europe on these receipts. Others are concerned that a digital tax could disproportionately hit European companies, while yet others are concerned about threatened retaliation by the White House for additional taxes on US companies.
The Financial Times reports that the European Commission has now come up with a compromise it hopes will keep everybody happy – other than the companies like Apple, Google and Meta who would be paying the new taxes, of course.
Brussels was considering changes to an existing proposal that would require all companies operating in the EU with revenue of more than €100mn a year to pay an annual lump-sum tax contribution, the officials said […]
Adjusting the thresholds and contributions under the Core proposal to cover only very large corporates would both increase the amount raised from tech groups and defuse criticism in Europe that Core would hit many medium-sized European companies, officials argued.
The revised version of the plan would not single out companies selling digital services, but would apply to all large corporations. Since it was the former proposal that led the White House to threaten retaliatory tariffs, the EU hopes that the new version won’t provoke a new trade war with the US.
The amount that would be levied on each company has not yet been decided. The plan is to seek agreement on the principle across the 27 EU countries before setting a rate for the tax.
This whole mess was supposed to have been resolved by a global agreement, brokered by the Organisation for Economic Cooperation and Development (OECD). This would have ensured that all companies worldwide pay at least some taxes in each of the countries in which they operate, and the plan had Apple’s support.