Spanish Government Approves Digital-Services Tax as Europe Targets Tech Giants

01/18/19 01:50 PM EST

By Adam Clark

 

The Spanish government approved a plan for a digital-services tax at a cabinet meeting on Friday, putting it on course to be the first European government to try and capture more of U.S. technology giants' online revenue.

Isabel Celaa, education minister and cabinet spokeswoman, said the tax will apply to 3% of large companies' digital revenue, bringing in 1.2 billion euros ($1.37 billion) annually. The tax will apply to companies with global revenue of more than EUR750 million, that generate at least EUR3 million in digital-services revenue in Spain.

Ms. Celaa said Spain would be the first European Union country to adopt such a tax. Several other European countries including the U.K. and France are planning similar measures, after hopes of EU-wide action foundered last year in the face of opposition from some member states.

U.S. technology companies such as Amazon.com Inc. (AMZN), Facebook Inc. (FB), and Uber Technologies Inc. have been criticized by European politicians for not reporting profit in local jurisdictions. Technology companies say they pay all the legally required taxes wherever they operate.

The Spanish government also approved a financial-transactions tax of 0.2% on share dealings in domestic companies with a market value of more than EUR1.0 billion.

The expected revenue from the proposed taxes was included in the draft budget presented by the Socialist government of Pedro Sanchez on Monday, which still needs parliamentary approval. The budget projected a 5.3% increase in public spending to more than EUR345 billion.

 

Write to Adam Clark at adam.clark@dowjones.com

 

(END) Dow Jones Newswires

January 18, 2019 13:50 ET (18:50 GMT)

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