BRUSSELS — European policymakers on Wednesday unveiled a proposal for a new tax on tech giants such as Facebook and Google, in a measure that could raise $6.2 billion through what advocates say would be a fairer way of taxing how the companies make their money.
The proposal would tap into digital titans’ revenues in countries where they have the bulk of their users and customers, imposing a 3 percent tax on income from online advertising, the sale of user data and the connecting of users to each other.
The initiative, which would face several rounds of approvals, comes amid a rapidly-heating trade conflict between Europe and the United States. Absent action by President Trump, new U.S. tariffs on steel and aluminum imports are set to go into effect on Friday, and EU leaders have threatened countermeasures to follow shortly after.
It also comes as Facebook’s actions are under a microscope, following revelations that the Cambridge Analytica data firm misused the data of 50 million U.S. Facebook users to help Trump win the presidency.
The action by the executive arm of the 28-nation European Union would seek to impose common tax rules across the EU’s vast market of 500 million consumers.
But the measure is likely to run into skepticism from the countries that serve as the legal homes to the companies, as well as small tech-savvy nations such as Estonia, where the technology behind Skype was born. Any EU-wide tax measure would require unanimity.
The goal, advocates say, is fairness. In Europe, companies with digital business models pay an effective tax rate of 9.5 percent, compared with 23.2 percent for companies with traditional business models, the European Commission said.
The proposed EU tax would only hit businesses with annual worldwide turnover above $923 billion that also make more than $62 billion of their revenue inside the European Union. That is being done to give small tech startups room to grow, European policymakers said. At least 120 global firms fit the criteria, said Pierre Moscovici, the top EU economy and tax official.
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