Tech lobby speaks out against EU digital tax proposal

Tech industry lobbying groups are banding together to speak out against the European Union for a proposed tax targeting internet companies.

A coalition led by the Information Technology Industry Council (ITI), which lobbies on behalf of companies like Google and Amazon, on Monday urged European Union officials reconsider a tax proposal that would hike rates on many technology companies.

{mosads}

“Taxing digital revenues rather than profits would not only overturn longstanding international principles on corporate taxation. It could also disproportionately harm the companies that Europe is most interested in supporting, namely start-ups and scale-ups that have expenses exceeding revenues” the group wrote in their letter addressed to the European Council, national finance ministers and Economic Commissioner Pierre Moscovici.

Other groups who signed on the letter include the Computer and Communications Industry Association, the Irish business group Ibec and techUK.

They argued that the European Union should instead develop a tax policy in line with the Organisation for Economic Co-operation and Development (OECD), an intergovernmental group of 37 countries.

“These proposals represent a troubling departure from ongoing multilateral OECD discussions, undermining certainty and predictability for trade and investment,” the coalition wrote.

Their letter comes as the European Union mulls a proposal that would tax digital revenues raising rates for companies like Google, Facebook and Amazon who do business online.

The European Commission said it wants the change to “ensure that digital business activities are taxed in a fair and growth-friendly way.”

Tech’s lobbying groups have launched an offensive against the tax. In February, they pressed Treasury to speak out against it which the agency ultimately did a month later.