Margrethe Vestager, the EU Competition Commissioner, believes Europe need not wait for global consensus before deciding on a digital tax, Reuters reports. Vestager wants the EU to take the lead on imposing heavier taxes on U.S. tech companies.
GAFA Needs to Pay its Fair Share of Taxes
According to Reuters, Commissioner Vestager thinks it is time for Europe to take the lead in the area of digital taxes. In an April 8, 2019 interview on France Inter Radio, Vestager declared that the EU shouldn’t have to wait for the rest of the world before deciding on how to tax U.S. tech companies.
Speaking during the interview, Vestager declared:
“We are becoming an increasingly digital world, and it will be a huge problem if we do not find a way to raise (digital) taxes. The best thing is a global solution. But if we want to obtain results in a reasonable period of time, Europe must take the lead.”
The EU Competition Commissioner is known for taking a hardline stance on U.S. tech companies and other Silicon Valley firms. Vestager is of the opinion that they ought to pay higher taxes in Europe.
In the past, Vestager has imposed significant fines on tech firms as well as forcing them to abide by EU regulations concerning data privacy rights. Now, the EU Competition Commissioner is championing the introduction of a “GAFA tax” (Google, Apple, Facebook, and Amazon).
Already, jurisdictions like France and the UK are mulling the introduction of a digital tax and oversight bodies to monitor EU-General Data Protection Regulation (GDPR) compliance. However, Vestager would prefer a set of rules that apply to the region as a whole rather than a patchwork of regulations for each member-state in the EU.
Are Cryptocurrency Companies Next?
While the focus is currently on social media and e-commerce tech giants, Vestager’s advocacy could potentially extend to cryptocurrency companies. Exchanges, brokers, and other companies that operate in the emerging digital economy could potentially be brought under the digital tax paradigm.
The imposition of significantly higher taxes on cryptocurrency firms by the EU could also impact the development of the industry in the region. Platforms may be forced to move to other areas with less stringent tax requirements.
For now, cryptocurrency taxation in Europe exists along the lines of income tax, capital gains tax, or a combination of both depending on whether the “taxed” entity is an individual retail trader or a company.
Back in January 2019, BTCManager reported that Danish authorities were gearing to begin collecting cryptocurrency taxes.