An EU report claims that online giants such as Google and Facebook could be responsible for lost tax revenues of up to 5.4bn Euros between 2013 and 2015, according to Reuters.
The EU is considering corporate tax reforms which would require internet companies to pay more in tax. Author of the EU report Paul Tang says the companies “minimize the overall tax burden in the EU by routing all revenues to low-tax member states such as Ireland and Luxembourg.”
This week EU finance ministers will hold a two-day meeting in Tallinn, Estonia to discuss how large online companies can be made to pay more tax on to European nations.
The main focus of the EU report is on Facebook and Google, which is now part of the Alphabet parent company. The two US-based companies record their revenues in Ireland, which enables them to avoid higher taxes applicable in other EU member states.
Google pays taxes of up to 9% of its revenue in countries outside the EU, but within the bloc the figure falls to as low as 0.82%.
France, Germany, Italy and Spain have proposed that companies should be taxed on their revenues rather than their profits. Such a move would also increase taxes payable by Amazon, which also has an EU tax residence in Luxembourg and was largely exempt from tax between 2013-2015.