The European Commission, Europe’s anti-trust and consumer investigation agency, is set to unveil proposals today for a digital tax on U.S. tech giants such as Apple that could further intensify the trade row pitting the European Union (EU) against President Trump. The EU is a political and economic union of 28 member states that are located primarily in Europe.
The tax, expected to be about 3% of sales on companies with worldwide annual turnover above $924 million, would come alongside a tightening of rules on data privacy.
EU Economics Affairs Commissioner Pierre Moscovici will present proposals aimed at recovering billions of euros from mainly U.S. multinationals that shift earnings around Europe to pay lower tax rates. The transatlantic blow has been championed by French President Emmanuel Macron and will be discussed over dinner at an EU leaders summit on Thursday, according to an AFP report.
The EU estimates that digital businesses pay an average effective tax rate of just 9.5%, compared with the 23.3 percent that traditional businesses pay. These numbers are, however, disputed by the tech giants, which have debunked the tax as a “populist and flawed proposal,” according to AFP.
