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Germany Mulls Digital Services Tax on Tech Giants, Citing ‘Cunning Tax Evasion’

By  |  May 29, 2025
In Europe, Taxes In Focus For Tech Giants

Germany is weighing the introduction of a 10% tax on major digital platforms such as Google and Facebook, a move that could further strain trade relations with the United States, according to Reuters. The proposed levy, currently under review by the country’s newly appointed Culture Minister Wolfram Weimer, targets U.S.-based tech firms that generate significant revenue from German users but contribute little in taxes to the country’s coffers.

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    The initiative, first reported in Stern magazine, aligns with a broader European push to impose digital service taxes on multinational tech companies. Germany’s coalition government had already signaled its intent to move in this direction earlier this year.

    Weimer, who took office this month, said his ministry is developing legislation while also attempting dialogue with affected companies. According to Reuters, the minister accused platforms like Alphabet’s Google and Meta’s Facebook of engaging in “cunning tax evasion,” and expressed concerns about their monopolistic behavior and outsized influence on media and public discourse.

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    “These corporations do billions in business in Germany with extremely high profit margins and benefit enormously from the country’s media and cultural output as well as its infrastructure — but they pay hardly any taxes, invest too little, and give far too little back to society,” Weimer told Stern in the interview published Thursday.

    Related: Germany’s Antitrust Chief: EU-US Tech Policy Divide Is Mostly Rhetoric

    Germany would join a growing list of countries, including the UK, France, and Canada, that have already introduced digital levies on online platforms. According to Reuters, previous attempts by other nations to impose similar taxes prompted a fierce backlash from Washington during Donald Trump’s first term as U.S. president. The U.S. Trade Representative’s office launched investigations under Section 301, arguing that such taxes unfairly discriminated against American firms.

    Despite potential risks of retaliatory tariffs, the German government appears undeterred. Chancellor Friedrich Merz is expected to travel to Washington soon for talks with President Trump, though no official date has been confirmed. Trump has previously warned that he would not allow foreign powers to “appropriate America’s tax base for their own benefit.”

    Weimer’s comments reflect growing unease in Europe about the global dominance of tech companies and their influence over the information landscape. According to Reuters, the minister also raised the alarm about the concentration of media power, stating that such control poses a threat to democratic norms and freedom of expression.

    He cited a hypothetical scenario involving Google unilaterally renaming the Gulf of Mexico to the “Gulf of America” as an example of the disproportionate power wielded by digital platforms.

    Source: Reuters