Technology firms aren’t paying their fair share in taxes and it’s time to find a global approach to the problem, German Finance Minister Olaf Scholz told CNBC.
One of the biggest points of contention has been over the claim that much activity of tech firms — for instance, in online advertising — is not actually being taxed.
France has led the pack in the European Union, introducing a 3% levy on the revenues of tech companies that earn more than 750 million euros ($843 million) worldwide each year. The move has attracted the ire of the U.S., which is worried the measure could hurt American firms.
The U.K., meanwhile, has proposed a 2% digital services tax on tech firms that make at least 500 million pounds ($653 million) a year in global revenue.
There has been some disagreement among EU member states over how to implement a Europe-wide digital tax. EU Competition Commissioner Margrethe Vestager recently said Europe should “take the lead” on such a proposal if there is insufficient global consensus.
For his part, Scholz said finding agreement on tax reforms to match the digital age remained a “global” problem.
“I think we should find a global agreement on that question, this would help a lot,” Scholz said. He further noted that a “common approach” was being taken in the U.S., likely referring to American efforts to apply a minimum tax rate on multinational companies that operate in low-tax jurisdictions.