Germany seeks deal over digital tax for tech giants

Germany is calling for a binding deal on a Europe-wide tax on tech companies in December, according to the country's finance minister.

Under proposals from the European Commission, EU states will levy a 3pc charge on digital revenues from large tech companies, rather than profits.

Finance minister Olaf Scholz said Germany is hoping to get a binding agreement following a meeting of EU finance ministers in December.

This is despite calling for a revision of the plan earlier this month that would exclude any tax activities linked to carmakers.

Mr  Scholz told Germany's Der Spiegel newspaper: “If the negotiations continue the way that they have been going, we’ll still be in talks in 100 years. That is why I support the French model and want to offer the proceeds to the EU.”

French Finance Minister Bruno Le Maire also said on Monday that an agreement was close to being made.

EU states have been divided over proposed plans to tax companies like Google and Facebook on their turnover.

In the UK, Chancellor Philip Hammond has said he will push ahead with a 2pc tax on advertising revenues and other digital revenues from big tech companies with over £500m in turnover. The tax is expected to make £400m per year for HMRC.

However, the plans are currently under consultation and may change if there is an international agreement on how to tax digital companies.

An increasing backlash against tech companies is growing from governments around the world as they look to claw back taxes.

But the plans have been opposed by the US Treasury as anti competitive and punitive on US companies operating in Europe.

Critics, meanwhile, have questioned how governments will manage the tax, since digital revenues travel across borders. Apple, Uber and Airbnb could all also be hit by a digital services tax in the UK.