The Gafams (Google, Amazon, Facebook, Apple, Microsoft) are in the crosshairs of Europe and the OECD both for their excessive power and for their efforts to pay less tax. In their arsenal: the tightening of international tax rules. At the end of 2021, 140 countries agreed to impose a minimum 15% tax on multinationals.
The OECD announced in October 2021 that it would reach a final agreement (which has been postponed several times) on an international tax reform ordering a minimum corporate tax rate of 15%. The companies concerned are multinationals with a worldwide turnover of more than 20 billion euros and a profitability of more than 10%. The aim of this agreement is to curb the erosion of the tax base and the transfer of profits, i.e. to combat optimisation strategies that exploit loopholes (and differences) in the tax rules in order to make profits “disappear” for tax purposes or to transfer them to countries or territories where the company has no real activity. This new tax scheme will, among other things, allow part of the profits of the GAFAMs (Google, Amazon, Facebook, Apple, Microsoft) and the “new” NATUs (Netflix, Airbnb, Tesla and Uber) to be transferred to the countries where they generate their largest turnover. According to the OECD, the introduction of this minimum tax could lead to a 4% increase in total corporate income tax revenues, or about $100 billion per year.
Limiting the dominance of large platforms and controlling content
Linked to the initiatives on taxation, the Digital Markets Act (DMA) and the Digital Services Act (DSA) are being negotiated in the European Union. These two draft regulations aim to limit the domination of large platforms in the digital sector and to curb the spread of illegal content and products. The DMA aims to better regulate the economic activities of the largest platforms, described by the Commission as “gatekeepers”. With the acceleration caused by the global Covid-19 pandemic, they have become obliged to take advantage of the benefits of the Internet, making companies and individuals dependent on their services. Moreover, they are accused of preventing competition from other companies. The DSA plans to tackle sensitive content (racist, hateful, child pornography, terrorist, etc.) and illegal, counterfeit or dangerous products available online by harmonising the national laws in place in the Member States. These two regulations could be adopted and applied to all EU countries during the French Presidency of the Council of the European Union in the first half of 2022.
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