European Union states could have lost 5.4 billion euros in tax revenues from Google and Facebook between 2013 and 2015, according to a report of the European Union lawmaker responsible for a corporate tax reform that could upgrade online large’ tax bill.
The document, seen by Reuters, will be prepared on Thursday, the day before European Union finance ministers begin a two-day meeting in the Estonian capital Tallinn, in which they will deliberate how to raise taxes on large online businesses charged of paying too little in Europe.
Digital multi-national firms “reduce the total tax burden in the EU by narrowing all revenue to small-tax member states like Ireland and Luxembourg,” stated in the report, prepared by European Union socialist lawmaker Paul Tang.
The document focuses on the social network Facebook and search engine Google, now part of Alphabet, because the two US companies reserve most of their EU revenues in small tax-rate Ireland, a move that allows them to pay in the European Union much lower taxes than the one they face in the rest of the world.
It says that Google pays taxes worth up to 9% of its incomes outside the European Union, but this ratio goes down to nothing less than 0.82% inside the EU.
“Facebook’s taxes as an allocation of their revenue recorded outside the European Union ranges between 28 and 34%, while in the EU this is a surprisingly low ratio of 0.03 to 0.10%,” as reported.