Technological companies such as Spotify, Glovo or Zalando have once again raised their voices against the Tax on Certain Digital Services (IDSD), colloquially known as the ‘Google tax’. These companies maintain that they are “disproportionately affected” by the IDSD, which limits their ability to expand and hurts them relative to their competitors in the rest of the world.
In a letter addressed to the Minister of Finance, María Jesús Montero, and to the other holders of the branch at the European level, these companies demand a “global solution” that provides “equity and stability” in the international tax system. And they describe the current framework as detrimental “for economic growth, investment, innovation and employment”.
In their explanatory statement, they argue that the ‘Google tax’ has a greater impact on companies that are in the early stages of growth, “especially those that are not yet profitable and those with low margins”.
According to these technologies, the IDSD is a “blunt political instrument aimed at large and profitable companies”, although it taxes gross income instead of profits, something that creates “unequal conditions”.
In addition, Spotify, Glovo or Zalando, some of the multinational signatories to the letter, consider that the aforementioned tax gives rise to instances of double taxation, since the income ends up subject to corporation tax, Value Added Tax (VAT) and other “unilateral tax measures in the same or other jurisdictions”.
Technological companies maintain that these taxes can multiply the detrimental effects for companies, especially in the case of not reaching a consensus on the ‘First Pillar’ that is being negotiated in the Organization for Economic Cooperation and Development (OECD) for a future global tax reform. In fact, they ask that a final resolution be waited for, “in order to provide legal and fiscal security.”
The companies that signed the letter are Adevinta, AirHelp, Allegro, Booking.com, Catawiki, Criteo, Delivery Hero, Glovo, Just Eat, Schibsted, Spotify, Trustpilot, Vinted, Wolt and Zalando.
