Spanish lower house agrees to proceed with 'Google tax' draft

Spain’s lower house, the Congress of Deputies, has voted to start drafting a new 3 percent tax on the digital revenues of large internet firms following similar moves in other European countries including France, the UK and Italy. The so-called “Google tax” is designed to prevent companies including Google, Amazon, Facebook and Apple from avoiding tax by routing their profits to Ireland and other low-tax states. Finalising the legislation is now set to take a further 3 to 4 months.

Spain’s government is hoping to raise some EUR 1.2 billion a year from taxing online advertising, platforms and sales of user data by companies with global revenues above EUR 750 million that bring in a minimum of EUR 3 million in digital services revenue in Spain. However, the government clarified that the tax would only be implemented if OECD member states agree to a joint digital levy. “It is a transitional and provisional decision until a regulation is approved at international or at least European level,” said budget minister Maria Jesus Montero, according to Reuters.

Earlier this week, the US Trade Representative’s office announced the launch of a “Section 301” probe into digital services taxes that have been adopted or are being considered by Spain and other US trade partners.