Business Technology

Thursday 21 November 2019

Margrethe Vestager warns OECD proposals must be agreed to head off tighter tax laws on tech firms

Margrethe Vestager (Maxwells Photography/PA)
Margrethe Vestager (Maxwells Photography/PA)

Adrian Weckler in Lisbon

EU Competition Commissioner Margrethe Vestager has welcomed “important changes” in Irish tax legislation, but has warned that tighter tax laws on tech companies will be pursued within the EU if current OECD proposals are not agreed.

“On the question of the Irish tax system, we’ve had very good cooperation with Irish authorities over the last couple of years,” she said, speaking to reporters at the Web Summit in Lisbon. “And there have been important changes in the Irish tax legislation.”

READ MORE: Tough tech: EU regulator sets out plans to take on the global giants

Asked by about tax laws on tech companies throughout Europe, Ms Vestager said that progress has been “very slow”, but that new OECD proposals may succeed in tightening the tax net in Europe on tech giants.

“Obviously, I hope that they will get sufficient support,” she said.

“But if not, from us on the Commission side, we will resume our work to try to enable European-wide taxation on digital companies.

"Because it doesn't make any sense that most companies pay their taxes while other companies, depending on their technology and their business models, don’t. So we very much hope that we will have results.”

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The OECD proposals would see companies paying more tax in the countries where their products or services are sold, rather than in a central location such as Ireland. The proposals are part of a new wave of worldwide initiatives to crack down on corporations avoiding tax laws by legally swapping domiciles or jurisdictions.

Asked about Google’s recent acquisition of the fitness tracker company Fitbit, Ms Vestager said that while the Commission is “concerned” about private health data falling into the hands of another big tech company, the Commission has not yet looked into the case.

Fitbit Charge 3 fitness trackers (Richard Drew/AP)
Fitbit Charge 3 fitness trackers (Richard Drew/AP)

Asked about whether the Commission might soon treat Apple Pay as a “dominant” service provider, Ms Vestager said that the Commission is considering whether “it’s becoming increasingly difficult to compete in the market for easy payments”.

READ MORE: Google parent Alphabet agrees £1.6bn Fitbit deal

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