European Union policymakers should focus on reaching a multilateral agreement on a digital tax for giants such as Google or Amazon rather than trying to go it alone, Finance Minister Edward Scicliuna has said. 

Prof. Scicluna told EU member states' economy and finance ministers that Malta preferred a global solution to the issue rather than a regional one, arguing that a multilateral approach made more sense and would be more willingly embraced by the EU's global partners.

Speaking at an informal Ecofin meeting, Prof. Scicluna said he failed to see any difference between the Commiossion's short- and long-term proposals, since both involve action affecting third countries and the reallocation of taxing rights. 

The European Commission has said it would like to introduce a temporary digital tax which covers activities currently not taxed, as an interim solution while it works on reforming corporate tax rules to ensure profits are registered and taxed in the jurisdictions online companies do their business in. 

If implemented, the interim tax would target revenues derived from, among other things, the sale of online advertising space, digital intermediary services and the sale of user-generated data.  

According to the Commission, digital companies such as Google, Amazon and Facebook currently have an average effective tax rate half that of the traditional economy in the EU.

 

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