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EU reveals more details of tech giant tax plans

(Image credit: Image Credit: Denzel / Pixabay)

The European Union wants to put an end to tech giants' tax evading practices, and we now have more details on what that actually means. 

In layman's terms, the EU wants to collect money where it's earned, and not where it's kept. That way, it hopes to close the loophole that pops up with most of the large tech companies which set their headquarters up in tax safe havens to avoid paying higher sums.

Speaking about the new rules, French Finance Minister Bruno Le Maire said the EU is looking to tax tech firms' revenue. The rate would be between two and six per cent, more likely skewing towards two per cent, at least for starters.

As Le Maire said, it's easier and faster to implement a lower rate and tweak it later, rather than to go for a higher rate from the start and risk longer negotiations.  The new EU directive is expected to be unveiled in the coming weeks, it was added.

Many of the largest technology companies of today, including Facebook, Apple and Amazon, have been accused of using holes in laws to avoid paying taxes in European countries. Companies are expected not to take this new directive laying down, and Ireland is also expected to join the fight.

Image Credit: Denzel / Pixabay