New European tax proposals aimed at Apple, Facebook, Google & other tech giants
The Organisation for Economic Cooperation and Development aims to overhaul worldwide tax laws that it says are no longer suitable in an age of multinational businesses such as Apple, Facebook and Google.
The Organisation for Economic Cooperation and Development (OECD) has revealed its initial proposals that will see individual governments being able to tax multinational companies more. While it does include retail businesses with physical outlets in different countries, it affects Apple, Facebook and most big tech firms. The new plans are chiefly concerned with any firm that earns income from these territories.
"The current system is under stress and will not survive if we don't remove the tensions," said Pascal Saint-Amans, OECD head of tax policy.
According to Reuters, Saint-Amans said that the planned overhaul would see an impact equivalent to a few percentage points of corporate income tax.
The companies affected are so far defined as ones that operate across borders and have a total revenue of over $821 million. They do not have to have a physical presence in the country, they solely have to have a "sustained and significant" customer base there.
The OECD revealed its proposals ahead of a meeting in Washington next week where finance ministers are to discuss them. Over 130 countries have already agreed in principle for the need for reform, and the OECD aims to present a more detailed outline agreement to them in January 2020.
The OECD plans for overhauling the multinational tax situation is only one of many continued efforts to address the rise of firms such as big tech ones that are able to earn large sums in countries that charge low taxes.
Apple has been appealing against the European Union's ruling that required it to pay $14.4 billion in back taxes to Ireland.
According to Reuters, the OECD plans would affect these lower-taxed regions, effectively ending their tax haven status.