It’s a little piece of music we’ve been listening to for a few years: big tech companies have less tax burden than other companies. According to a recent study by NikkeiThis is not just a rumor. The tax burden of the four big giants (Google, Apple, Facebook and Amazon) is actually not shown than 60% of the world averageor about 15%. That could change with the tax increase proposed by Biden.
Large tech companies have a lower tax burden than the global average
The reality is that the current tax system is not suitable for the digital economy. Tax competition between countries allows technology giants to play on multiple fronts and optimize their tax burdens. This is exactly what Apple, Google, Amazon and Facebook do and place their European headquarters in Irelandwhere the tax rate is lowest. Nikkei conducted a survey to understand the extent of the problem.
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Today, policymakers around the world want to come together to define global tax rules. The global average corporate tax rate is 25.1%. This is obviously more than the GAFA average that is 15.4%. If this tax burden is low, it is precisely because their profits come largely from intangible assets that can easily be located in low-tax areas. In Ireland, the corporate tax rate is 12.5%, in France 32.02%…
The development of the digital economy has therefore created great disparities between companies around the world. If we take “classic” companies such as those in the automotive, chemical, materials or energy sectors, this is the average of their tax burden rather around 30.7%. The current tax laws cannot react to the digitization of the economy. However, some technology companies support the idea of global tax harmonization.
The global trend is towards tax increases
Karan Bhatia, Google vice president of public policy, said: “Corporate tax is an important way for companies to contribute to the development of the countries and communities that live there. Google is committed to this and we advocate a new tax environment that is better suited to the new economy than our users would find fairer and more appropriate.”. Apple doesn’t entirely agree, Amazon says it pays its taxes in accordance with the laws in every country it operates in, and Facebook has refused to comment.
Joe Biden wants to raise taxes in the United States and make this reform a big change for the country. He wants to do it Lower corporate tax from 21% to 28%. In their financing plan, the improvement of the network infrastructure is mentioned in particular. This increase should also make it possible cover the costs of the previous administration Coping with the economic slowdown caused by the Covid-19 pandemic. This is the new global trend.