Brussels is considering taxing big US tech companies through a broad levy on large corporations to raise EU revenues while avoiding Trump administration backlash. The European Commission was working on new ways to capture more income from tech groups such as Apple, Meta and Google without singling them out, after Washington threatened retaliation against countries implementing digital services levies. The discussions come as EU countries negotiate the bloc’s shared budget and face spending constraints, leading to demands for new centralised levies while global efforts to tax multinationals’ profits falter.
Brussels was considering changes to an existing proposal requiring all companies operating in the EU with revenue of more than €100mn a year to pay an annual lump-sum tax contribution. Adjusting the thresholds and contributions under the Corporate Resource for Europe (Core) proposal to cover only very large corporates would increase revenue from tech groups and defuse criticism that Core would hit many medium-sized European companies. The new tax would cover all types of companies, not just digital services, but specifics were still under discussion.
The Core tax is part of a group of five new levies or “own resources” that would collectively raise about €60bn a year for the EU’s common budget from 2028. However, it is fiercely opposed by a majority of EU countries that argue it would disadvantage medium-sized European companies compared to foreign competitors. Officials said changing thresholds to exclude medium-sized businesses would likely gain broader support but requires agreement from all 27 EU countries.
The Commission declined to comment. Global efforts to tax big digital services companies have stalled since the 2021 OECD agreement faltered following US President Donald Trump’s re-election in 2024, which an EU official described as “dead”. Brussels had put on hold legislation for a bloc-wide digital services levy to allow for the global deal to be implemented but remains wary of any tax design that would single out digital groups due to fears of US retaliation.
France, Italy, Spain and Austria already have national digital services levies and have been targeted by the US with Section 301 investigations, potentially leading to retaliatory trade tariffs.
Source: Financial Times Companies · Summarized by HeadlinesBriefing