The EU is considering a new tax on U.S. tech giants — FT

The European Commission is considering the possibility of introducing a new broad-based tax on large corporations. In this way, the EU hopes to generate additional revenue from leading American tech companies, including Google, Apple, and Meta, while avoiding potential retaliatory measures from the Donald Trump administration.

According to six officials familiar with the matter, Brussels is looking for ways to generate more revenue from companies such as Apple, Meta, and Google without singling them out as a separate target category. Washington has previously threatened trade retaliation against countries that impose direct taxes on digital services.

The discussions are taking place against the backdrop of negotiations on the bloc’s joint budget and internal budget constraints in EU countries, while global efforts to tax the profits of multinational corporations have reached an impasse.

How Corporate Tax Is Set to Change

Brussels is considering changes to the existing initiative known as “Corporate Resource for Europe” (Core):

• the current version of the proposal requires all companies operating in the EU with annual revenue exceeding 100 million euros to pay an annual fixed tax contribution;

• in its current form, the mechanism covers only a small portion of multinational companies’ profits and faces resistance from most EU member states, as it puts many medium-sized European businesses at a disadvantage;

• changing the thresholds to cover only mega-corporations would simultaneously increase revenue from tech conglomerates and protect European small and medium-sized businesses;

• The new tax will apply to all types of businesses, not just the digital services sector.

The Core levy is part of a package of five new own-resource mechanisms that, starting in 2028, are expected to collectively generate approximately 60 billion euros per year for the EU’s common budget. Approval of the changes will require the consent of all 27 member states.

The Threat from the U.S. and the Status of a Global Agreement

Previous international efforts to tax digital giants have stalled. A 2021 agreement under the auspices of the OECD, which was intended to require large corporations to pay taxes in the countries where they generate revenue, was blocked following the re-election of U.S. President Donald Trump in 2024 — EU officials effectively consider the agreement dead.

A direct digital tax is unlikely to gain support from EU member states due to fears of U.S. retaliation. France, Italy, Spain, and Austria already have national digital taxes, prompting Washington to launch a Section 301 investigation, which threatens these countries with trade tariffs.

The European Commission and the CCIA, which represents the interests of American tech giants, declined to comment on the negotiations regarding the new levy. At the same time, a European Commission spokesperson said the Commission is ready to support the EU Council and the European Parliament in reaching an agreement this year on a package of new own resources to ensure funding for shared priorities over the next decade.

This was reported with reference to data from the Financial Times.

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