Israel to Levy New Taxes on Google, Facebook in Policy Shift
- Measure meant to level playing field with local businesses
- Push to tax Internet companies part of worldwide campaign
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Israel has expanded its definition of who must pay taxes on commerce, targeting digital multinationals such as Facebook Inc. and Google that critics say get a free ride.
Because much of today’s trade is carried out on the Internet, a foreign firm may now be considered a “permanent establishment” and subject to tax even if most of its presence is virtual, the Israel Tax Authority said in an e-mailed statement. The authority said Internet multinationals will be required to pay value-added tax, which is 17 percent for Israelis.