Spain approves digital tax that has angered US

Madrid: Spain’s government approved Tuesday a digital services tax, following a similar move by France that prompted threats of retaliation from Washington which argues it unfairly targets US tech giants.

As in neighbouring France, the levy will place a 3.0 percent tax on earnings from online ads, deals brokered on digital platforms and sales of user data by tech companies with at least 750 million euros ($812 million) in global revenue such as Facebook and Google.

But Budget Minister Maria Jesus Montero said the tax would not be implemented until December 2020 to give time for the Organisation for Economic Cooperation and Development (OECD) to reach an agreement on a separate, global tech tax.

Washington initially threatened to impose sky-high retaliatory duties on $2.4 billion of French products.

But both sides agreed last month to pursue a global framework under the aegis of the OECD and Paris suspended collecting the revenue until the end of 2020.

“Spain can’t afford to have a tax system rooted in the last century. We must move towards a tax system for the 21st century, which takes into account this new form of activity,” Montero told a news conference after Socialist Prime Minister Pedro Sanchez’s cabinet approved the digital tax. – AFP