Spain is looking to adopt a digital taxation system similar to the U.K. and France, amid threats from the White House. The Spanish government approved the introduction of new taxes on digital business and stock market transactions, called the Google Tax and Tobian Tax, during the Cabinet’s weekly meeting, waiting for the Parliament’s approval.
Spain wants to levy a 3% tax on online ads, on deals brokered on digital platforms, and on sales of user data by tech companies that have a turnover of more than 750 million euros a year internationally and more than 3 million in Spain. It hopes to raise close to 1 billion euros a year in extra tax revenue.
Finance Minister Mara Jesus Montero said the Google tax, which has caused a row between the United States and other European countries like the U.K. and France, will only be levied after the end of the. Montero hopes that by this time, governments around the world have already come into an agreement on digital business taxes.
In recent months, the United States has made several threats to countries that plan to impose a digital tax, which could potentially affect many American tech companies. Speaking at the World Economic Forum in Davos, Switzerland last month, U.S. Treasury Secretary Steven Mnuchin said that those who planned to levy the digital tax are at risk of being imposed with tariffs from the United States.
“If people want just arbitrarily to put taxes on our digital companies, we will consider arbitrarily putting taxes on car companies,” said Mnuchin.
Aside from the United Kingdom, France was also targeted by Washington over its plans to impose a 3% tax on digital services. Back in August last year, France has voted to impose a 3% tax on tech companies who earn through digital operations that would impact big American tech giants like Facebook, Amazon, and Google. The tax applies to organizations with annual revenues of more than 750 million euros ($830 million) arising from “digital activities,” including 25 million euros ($27 million) made in France.
Even the European Union has said that it will retaliate against the U.S. in the event that Uncle Sam imposes an arbitrary tariff on European companies because of digital tax. Speaking to the reporters during the G7 Meeting in France back in August, Donald Tusk, president of the European Council, said that the European Union would “respond in kind” if Washington pushes through with its previous threat that it will impose a tariff on French goods over the matter.