EU - Digital Tax Globalization

Arno Froese

The European Commission said the EU should proceed with an overhaul of taxes on digital firms even if the rest of the rich world did not follow suit, a draft report said.

The document is part of an EU push to tap more revenues from online multinationals such as Amazon and Facebook, who are accused of paying too little tax in Europe by routing most of their profits to low-rate countries such as Ireland or Luxembourg.

Traditional large firms face a median 23.2 percent tax rate, while digital giants do not pay more than 10.1 percent—and when they sell directly to customers, rather than to firms, their effective rate goes down to 8.9 percent, data cited by the Commission showed.

An earlier report by a European lawmaker said EU states may have lost in tax revenues up to 5.4 billion euros ($6.5 billion) just from Facebook and Google, now part of Alphabet, between 2013 and 2015.

The best way to tackle distortions would be to review the notion of “permanent establishment” so that firms could be taxed also in countries where they do not have a physical presence, the Commission said.

At the moment online companies can often avoid paying taxes in countries where they generate large revenues because they do not have a physical presence there.

To move ahead more quickly, the Commission said short-term solutions could be considered. They include an “equalization” tax on turnover, as proposed by France and backed by 10 EU countries, the report said.

But short-term options “have pros and cons, and further work is needed,” the Commission said, warning that they may go against double-taxation treaties, state aid rules, fundamental freedoms and EU international commitments under free trade agreements and the World Trade Organization (WTO).

-ca.news.yahoo.com, 20 September 2017

Arno's commentary

The EU represents the world’s largest economy; they are the largest importer and the largest exporter. But taxation is an extremely complex problem. Each country has its own constitution, rules, and regulations that often conflict with one another. So, what is the answer? True globalized taxation for the European continent, which then will reach across the world.

Daniel makes a prophecy regarding the spirit of antichrist in Daniel 11:20: “Then shall stand up in his estate a raiser of taxes in the glory of the kingdom: but within few days he shall be destroyed, neither in anger, nor in battle.” Next in line comes a political genius: “And in his estate shall stand up a vile person, to whom they shall not give the honour of the kingdom: but he shall come in peaceably, and obtain the kingdom by flatteries” (verse 21); and finally, Antichrist. “And the king shall do according to his will; and he shall exalt himself, and magnify himself above every god, and shall speak marvellous things against the God of gods, and shall prosper till the indignation be accomplished: for that that is determined shall be done. Neither shall he regard the God of his fathers, nor the desire of women, nor regard any god: for he shall magnify himself above all. But in his estate shall he honour the God of forces: and a god whom his fathers knew not shall he honour with gold, and silver, and with precious stones, and pleasant things” (verses 36-38).

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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