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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.
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“My biggest concern with the tech companies is that they tend to pay taxes nowhere,” Scholz told CNBC’s Annette Weisbach in an interview earlier this week.
Google, Amazon, Facebook and Apple — a group of corporations sometimes labeled by European officials as “GAFA” — have faced intense criticism from politicians in the continent for not paying enough tax.
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.