International

Big Tech Firms Pass Along Higher Fees In Europe

Big Tech Firms Pass Along Higher Fees Amid Tax Hike

Advertisers in Europe are taking a hit as Apple and Amazon join Google in passing along the cost of new taxes aimed at Big Tech by the United Kingdom and other European governments.

Amazon on Tuesday (Sept. 1) bumped up fees for third-party sellers in the U.K. by 2 percent, while Apple is changing how it pays developer fees, adding 2 percent to the 20 percent value-added tax it already pays on each purchase, according to The Verge.

And in Turkey, Apple has boosted the prices in its App Store by a hefty 7.5 percent as it tries to offset that country’s digital tax hike.

Meanwhile, Google is slapping a 2 percent fee on ads in the U.K. and a 5 percent fee on ads in Turkey and Austria.

The moves come in response to the U.K.’s new digital services tax – which slaps a 2 percent tax increase on revenue generated by search engines, online marketplaces and other social services – as well as similar taxes imposed by other governments on the continent.

France and Italy have also gone ahead with their own digital services tax increases.

The growing number of digital taxes being rolled out by countries across Europe have raised the hackles of advertisers and publishers, which are already grappling with a drop in business’ spending on promotional efforts as the coronavirus pandemic drags on.

Needless to say, the tech giants aren’t happy about the tax increases, and have argued they would rather see a global tax system than a free-for-all, with various countries competing to come up with their own individual taxes on digital services.

“Typically, these kinds of cost increases are borne by customers, and like other companies affected by this tax, we will be adding a fee to our invoices, from November,” Google said, according to the Financial Times. “We will continue to pay all the taxes due in the U.K., and to encourage governments globally to focus on international tax reform rather than implementing new, unilateral levies.”

——————————

PYMNTS TV LIVE OCTOBER SERIES: B2B PAYMENTS 2021 – WHAT WILL YOU CHANGE? 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW