French President Emmanuel Macron’s ambitious plans for an EU digital tax targeting US tech giants faced strong headwinds on Saturday from small member states eager to defend their strong ties with Silicon Valley.
Finance ministers from the EU’s 28 member states were to discuss a controversial proposal aimed at claiming a bigger share of billions of euros from mainly US multinationals that shift earnings around Europe so as to pay lower tax rates.
“It must be discussed with the Americans, because if we do this all by ourselves as the EU, this digital tax will be very ineffective,” said Luxembourg Finance Minister Pierre Gramegna as he arrived for talks in Sofia, Bulgaria.
Luxembourg hosts the EU headquarters for Amazon and along with Facebook and Apple hub Ireland, is loathe to see US tech giants head for the exit.
Getting all countries on board is crucial as tax reforms in the EU require unanimity. The special tax is the latest measure by the European Union to rein in Silicon Valley giants and could also further embitter the bad-tempered trade row pitting the EU against US President Donald Trump.
“It is not an anti (US tech giant) tax, it is not an anti US tax, it is not a protectionist approach, it is something which it is in interest of all Europeans wherever they live,” said EU Economic Affairs Commissioner Pierre Moscovici, who is driving the plan.—APP