Europe recover from the crisis due to the US

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www.vsyako.netPhoto: Dado Ruvic / Reuters

Europe intends to recover from the effects of the pandemic in the early stages of the global crisis at the expense of U.S. companies by imposing their higher taxes, writes CNBC.

We are talking about income tax digital companies around which in recent years has been a lot of controversy between the authorities of the European countries as well as between the EU and the USA. For 2019, the largest members of the bloc were trying to agree on a single tax on income of companies such as Google, Facebook and Amazon.

The peculiarity of their work is that they can sell goods and provide services across the globe without being tied to a particular country. These are the companies themselves and the governments of some countries, primarily Ireland, introducing reduced rates income taxes based on the fact that such companies will be registered in their jurisdiction and will pay taxes in their budget.

However, disputes about the rate and manner of collection of the single tax have not led to a common decision and was deferred to proceedings on the level of the Organization for economic cooperation and development (OECD). In parallel, some countries, such as France, have imposed their own taxes, without waiting for a common solution.

This, in turn, has repeatedly caused a sharp reaction of the U.S. government and personally the President of Donald trump, as most companies that fall under the action of potential tax — American. The White house believe that a large part of their profits should be taxed at home.

Now, in terms of digital companies and their income is expected to increased attention from the European authorities, in particular, the European Commission (similar to a supranational government at the EU level), which in mid-may announced a new financial aid package for crisis-affected in the amount of 500 billion euros and forced to seek sources of funding for such subsidies.

Digital companies are attractive for tax authorities of European countries for at least two reasons indicate that respondents edition analysts. First, these companies on average pay taxes in Europe at a reduced rate compared to the majority of enterprises — 9.5% vs 23,2. Secondly, they are less than others suffered from the effects of the crisis and many were able to make it.

As a possible solution can be used for VAT or income tax, but the final decision on this issue yet. It is also unclear who will take the first initiative: the national government or the EU.

Video, photo All from Russia.

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