“The ‘Google Tax’, a missed opportunity for the EU”, Andrés Ortega (Elcano, Spain)

Andrés Ortega, The ‘Google Tax’, a missed opportunity for the EU, March 2019

Existing tax rules were not designed for the new digital economy or for the business models that are being established. Many companies are digital or conduct a major part of their business in the digital sphere. Nine out of the world’s 20 largest companies by market capitalisation are digital, compared with one just 10 years ago. They often generate business and profits without any physical presence, because this is no longer essential (although it is essential for part of the online market, because people still have to eat, dress and move around, among other things). The users themselves generate value for digital companies, in exchange for theoretically free services, which usually elude traditional taxation. Adaptation is in order. States need to do it. The EU has tried, albeit in a provisional way, and failed, shackled by the rule of unanimity in these matters and the fiscal rivalry that exists between its member states.

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