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EU to tax tech giants at ‘two to six percent’: France

The EU will soon unveil a plan for taxing major internet companies like Amazon and Facebook by imposing a levy of two to six percent on revenues in every country where they operate, French finance minister Bruno Le Maire said on Sunday.

EU to tax tech giants at 'two to six percent': France
French President Emmanuel Macron visits an Amazon plant in France. Photo: Yoan Valat / Pool / AFP
“The range will be from two to six percent; but closer to two than to six,” Le Maire told the Journal du Dimanche newspaper.
   
The European Commission has said it will present by end March an overhaul of its tax rules, which currently allow US digital economy giants to report their income from across the bloc in any member state.
   
That leads them to pick low-tax nations like Ireland, the Netherlands or Luxembourg, depriving other nations of their share of the revenue even though they may account for more of a company's earnings.
   
“The heads of these companies know themselves that this system can't continue,” Le Maire said.
   
Critics say the tax-avoidance strategies used by the tech titans known as GAFA — Google, Amazon, Facebook and Apple — deprive EU governments of billions of euros while giving them an unfair advantage over smaller rivals. 
 
The Organisation for Economic Cooperation and Development says such strategies cost governments around the world as much as $240 billion (195 billion euros) a year in lost revenue, according to a 2015 estimate.
   
Asked if the proposed rate might be criticised as too low, Le Maire said: “I would rather have a law that can be implemented quickly instead of drawn-out negotiations.”
   
American tech giants appear to believe the European tax revamp is in the cards, with several already announcing pledges to pay more in each country where they operate as governments step up their fiscal demands.
   
Amazon said last month that it had settled a major tax claim in France and that it would start declaring all its earnings in the country.
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Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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