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EU to announce proposed tax ruling on Google, Facebook, others

The European Union plans to propose rules that would impose a "digital tax" on tech companies' revenues, which the bloc expects to generate about €4.8 billion annually, the Financial Times reported, citing a draft proposal.

The proposed EU regulation, which is anticipated to be announced in the week of March 19, is likely to enforce a tax of 3% from earnings of companies. However, the rates may still change at this stage.

The plans include a levy on advertising revenues for online companies like Alphabet Inc.'s Google Inc., fees from subscribers for service providers such as Apple Inc., and a tax on income earned by entities selling data to third parties.

Tax charges will be enforced on online companies with an annual global turnover of more than €750 million and EU-generated total taxable revenues of about €50 million.

Digital companies, such as the likes of Facebook Inc., also need to have users of at least 100,000 to be covered by the upcoming tax regulation.

French Finance Minister Bruno Le Maire recently confirmed that the European Union is planning to collect taxes in the range of about 2% to 6% of tech companies' revenues.

France, Italy, Germany and Spain are pushing for tax reforms in the tech sector, as they want a move away from the EU's current tax framework under which tech companies transfer profits from European countries with higher tax rates, such as France, Germany and the U.K., to offices in other countries within the EU that have lower corporation tax regimes, such as Ireland and Luxembourg.