The finance leaders in Europe called for more progress to be made on rules for taxing digital companies during a G20 meeting of finance ministers and central bankers this past weekend.
Reuters, citing the communique that came out of the meeting, reported the finance leaders reaffirmed their commitment to overhaul the international tax system by 2020 to take into account the shift to a digital economy. The communique did not provide further details about the efforts, noted Reuters.
Earlier this year the European Commission proposed rules that would result in digital companies paying more taxes than they do now. U.S. tech companies including Google, Facebook and Amazon would be among the roughly 200 companies that would face the new tax. European officials earlier this year estimated the change in tax rules would bring in around $6 billion in additional annual revenue.
During the G20 meeting, European Commissioner for Economic and Financial Affairs Pierre Moscovici told reporters that big digital companies have “to pay their fair share of tax, because basically what we are talking about here is fairness.” At the same time, some EU members expressed concern that there made retaliatory measures from international partners if the tax is put in place. “One of the big challenges is that taxation of the digital economy is mostly, of course, a taxation of American companies — because they are the key players in the world — so the United States feel that this is an attack concerning their digital economy, which it isn’t really,” European Council representative to the G20 Hubert Fuchs said on the sidelines of the meeting, according to Reuters. U.S. Treasury Secretary Steve Mnuchin has said earlier about the tax proposal that he opposes any proposals by any country that single out U.S. digital companies, which are key contributors to the economy in the U.S.
Reuters noted that the tax would also be a way for Europe to show President Donald Trump that it is united and strong, a senior European official told Reuters during the meeting. The unnamed official noted that it’s not fair that small and medium-sized businesses in Europe pay more taxes than the Internet companies.