Spain OKs Tech Taxes Opposed by US

The Google tax and Tobin tax still require parliament’s approval.

Google logo on a carpet at the entrance of Google France in Paris, Nov. 18, 2019.
Google logo on a carpet at the entrance of Google France in Paris, Nov. 18, 2019.
AP Photo/Michel Euler, File

LISBON, Portugal (AP) — Spain’s government approved Tuesday the introduction of new taxes on digital business and stock market transactions, following similar steps by other European countries.

The Cabinet agreed at its weekly meeting to adopt the so-called Google tax and Tobin tax. The measures still require parliament’s approval.

Finance Minister Mara Jesus Montero said the Google tax, which has angered U.S. authorities and brought a threat of tariffs by the Trump administration, will be levied only from the end of the year.

By then, the government hopes an international agreement on digital business taxes will be in place. The Organization for Economic Co-operation and Development, which advises the world's rich countries on policies, is currently trying to draw up the agreement.

Montero said the government wants a “fairer" tax system, adapted to the new economic trends of globalization and digitalization.

Spain's Socialist-led coalition government is following other European countries, such as France and the United Kingdom, in adopting a digital tax.

The measure is an attempt to get around tax avoidance measures frequently used by multinationals. Big tech firms such as Google and Facebook pay most of their taxes in the European Union country where they are based and often pay very little in countries where they run large and profitable operations.

Spain wants to place a 3% tax on online ads, on deals brokered on digital platforms and on sales of user data by tech companies that have a turnover of more than 750 million euros a year internationally and more than 3 million in Spain. It hopes to raise close to 1 billion euros a year in extra tax revenue.

Other EU countries, such as France, Italy and Belgium, have already passed a Tobin tax. In Spain, the government aims to levy a 0.2% tax on share purchases involving companies worth more than 1 billion euros. That should raise more than 800 million euros annually, according to the government.

A Socialist government first said it wanted to adopt the new taxes in January of last year, but an April general election foiled its plans.

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