SHANGHAI, April 19, 2018 (Newswire.com) - Earlier this week, German industry association, BDI, voiced its opposition to new regulations proposed by the European Commission in an effort to compel digital business to pay more tax. It stated that additional taxes on digital companies could exacerbate trade tensions with the United States.
United States President, Donald Trump has granted members of the European Union as well as six other nations until the first of next month to reach an agreement whereby the temporary exemptions from metals tariffs he imposed last month are made permanent.
Ashton Whiteley analysts say the European Commission’s suggested digital tax comes at a bad time because it could worsen already strained ties between the EU and the US.
A BDI industry association official stated that this proposal increased the risk of escalating trade conflict with the United States.
The proposed tax was announced by the European Commission last month and Ashton Whiteley analysts say that major US tech companies would pick up the majority of any bill.
The reasoning behind the European Commission’s proposed digital company tax is that leading digital firms have an average revenue growth of approximately 14 percent. This is a great deal higher than the rate of growth of other multinational firms and yet digital companies are liable for less than 50% of the tax of other companies.
Ashton Whiteley analysts say that under the proposed scheme, firms with sizeable digital revenue in the European Union will be liable for 3 percent tax on revenue derived from online services. Ashton Whiteley analysts say this will bring in approximately 5 billion euros in tax revenue.
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Source: Ashton Whiteley