Eduardo González
The latest warnings from the US authorities about the application in Spain of the tax on digital services, popularly known as the Google Tax, are not going to deter the government of Pedro Sánchez, who is still prepared to go ahead with his idea regardless of who occupies the White House.
The Office of the United States Trade Representative (USTR) yesterday described the tax approved in Spain – which enters into force today – as “discriminatory” because it establishes a threshold for revenue and a selection of services that it considers harmful to US companies. Specifically, the tax sets a revenue threshold of EUR 750 million that will affect 60 companies, of which more than half, 34, are American and only two are Spanish. According to the agency, if a threshold of EUR 50 million were applied, the fee would affect 249 companies, including 20 Spanish and 80 American companies.
Therefore, this tax “discriminates against US companies, is incompatible with existing principles of international taxation and restricts US trade”, complained the USTR, which warned that it “will continue to evaluate all available options” to act in this case, which could result in the imposition of certain tariffs on Spanish products.
With regard to these accusations by the USTR, Spanish diplomatic sources assured yesterday that the tax should not be known as the “Google Tax” because it is not aimed at specific companies in any specific country, but rather its sole objective is to tax a type of economic activity that has become “central” in today’s international economy and whose importance has even increased in recent times with the COVID-19 pandemic.
Furthermore, they continued, the ability to decide which activities are taxed is part of the fiscal sovereignty of states and Spain has therefore chosen, like other countries (Austria and the United Kingdom were also warned yesterday by the USTR for similar reasons), to implement this tax regime unilaterally pending a decision on this matter at the international level, whether at the World Trade Organisation (WTO), the Organisation for Economic Cooperation and Development (OECD) or the G20.
With regard to the influence that the next changeover in the White House may have on this issue (the Democrat Joe Biden will take over the presidency of the United States this Wednesday, replacing the Republican Donald Trump, who has been very belligerent in this matter), the same sources stated that Spain wishes to be “very transparent” with its American counterpart with regard to this tax “regardless” of who governs in Washington.
