Perhaps from the Ecofin that is taking place in Tallinn definitive solutions to the issue of tax avoidance by web multinationals will not arrive, but certainly the European Commission will finally have the mandate to study the options for the future webtax, the tax charged to the giants of the digital economy: Google, Amazon, Facebook, Apple and then Airbnb, Booking.com and many others. “We can no longer accept that these groups operate in Europe by paying a minimum amount of tax. The efficiency of the economy such as fiscal fairness and sovereignty are at stake", wrote the ministers of the economy of Italy (Padoan), France (Le Maire), Germany (Schaeuble) and Spain (De guindos). "We have to speed up, the issue is now mature," Minister Pier Carlo Padoan repeated yesterday in Tallinn. The French Bruno Le Maire announced that five other countries have supported the initiative: Austria, Bulgaria, Greece, Slovenia and Latvia. Taxation in Europe is decided unanimously and it is unlikely – according to observers of European affairs – that states such as Ireland, Luxembourg, Holland, Cyprus and Malta will be able to give the green light to the measure.
THE STUDY: THE GOOGLE AND FACEBOOK CASE
In Italy in particular, according to a recent report by the Parliamentary Budget Office, Google declares 0,3% of total revenues and is taxed on this, while digital transactions in Italy represent 2,4% of the total. Facebook claims 0,1% and 2,8%. Then online advertising: in 2016 Google had a turnover of 82 billion and Facebook 33 billion. Here too the bulk was taxed outside Italy. According to the House Budget Committee, over 30 billion a year are subtracted from the tax base, which implies a loss of revenue of 5-6 billion. In short, the two giants of the web pay little change compared to the real turnover accrued on the net. Suffice it to say that the two companies in our country hold almost 50% of a market worth 2,3 billion euros based on last year's data processed by the Internet Media Observatory of the Milan Polytechnic.
THE LIGHTEST TAX HUNT
With online business the notion of a permanent "permanent establishment", which is the physical basis of a company, does not work. The big names on the web have happily entered the logic experienced for decades by the large multinationals in the manufacturing sector who have always exploited the tax competition between states in search of the lightest tax possible. Often through the so-called fiscal rulings (preventive special agreements) with the tax administrations to ensure laughable levels of taxation. It is the mechanism that has been shattered in recent years: after the LuxLeaks scandal, the European Antitrust closed various dossiers by indexing the "rulings" granted by Holland (Starbucks), Luxembourg (Fca) and Ireland (Apple), then were the investigations involving Amazon and McDonald's and Luxembourg.
THE POSSIBLE SOLUTIONS
As a possible solution to these problems, the Parliamentary Budget Office underlines that at a theoretical level and in the international debate, three methods of taxation for digital companies have been identified: 1) an income tax, even in the absence of a permanent establishment according to current legislation; 2) a withholding tax on revenues from digital transactions; 3) a specific tax on the consumption of digital goods. "At an international level, cooperative and coordination solutions are preferable to guarantee efficiency and fairness of revenue - write the technicians - but they would be subordinate to the protection of tax autonomy and competition and conditioned by the (long) times of consultation and decision of the various countries with different economic characteristics and tax policy objectives. On the other hand, the concrete experience of individual countries highlights a partial and insufficient approach with solutions that in most cases remained at the level of a single proposal or abrogated after a short time”.
WHAT ITALY HAS DONE
In the corrective maneuver last April, a provision was introduced to favor the "tax regularization of non-resident companies belonging to multinational groups active in Italy but without a permanent establishment in our country". But the procedure desired by the government was judged by the PBO technicians as "a sort of preventive and voluntary amnesty, with a facilitated regularization of previous tax positions and the guarantee for future years of a treatment based on the agreement and collaboration between enterprise and Administration through admission to the collaborative compliance regime introduced in 2015”. According to the analysts of the Parliamentary Budget Office, there are in fact some critical elements which would make the rule difficult to apply, in particular what is missing is international coordination which makes "objective the difficulty of individual countries to resolve the complex tax issues linked to the diffusion of the digital economy. It was preferred to incentivize voluntary tax compliance – reads the report – therefore linked to a concession. On the other hand, bill 2526 (the so-called "Mucchetti bill"), which intervenes on the same issues and is currently under discussion in Parliament, provides for a penalty, with a strong incentive for companies to regularize their condition of permanent establishment due to the high entity of the withdrawal at source in the event of non-regularisation".
DOUBTS
In short, the Italian webtax that aims to hit digital businesses has been poorly studied, also because a single country without homogeneous action at a European level risks making a hole in the water with this type of maneuver. Even if the problem exists and should be tackled head-on. But the effectiveness of the Italian rules is also questioned because by doing so "digital companies could be encouraged to remain 'in the shadows' by exploiting the margins of avoidance they have and trying to defer the negotiation of the tax burden". In practice, the convenience of adhering to the procedure will be “all the greater for companies for which an ordinary assessment is more probable and risky; the convenience for businesses, and for the tax authorities, also depends on the value of the constraint, envisaged by the law, of 50 million in revenues produced in Italy in one of the three previous years".
THE EUROPEAN SOLUTION
If the Italian line is not convincing, all scenarios remain open. And paradoxically, as the ministers of Italy, France, Germany and Spain hoped, a common European approach is needed, which is the conclusion also reached by the technicians of the Parliamentary Budget Office: "Introducing a taxation system on digital economy and "over the top" companies can have some effectiveness only in a context of supranational regulation and with a strong coordination of interventions at a European level. Conversely, digital companies would have no difficulty in circumventing the new rules by using the technological potential or by transferring costs to jurisdictions where taxation is higher".
Da Formiche.net.
