American Tech Giants Face New Tax Grab in Europe

The European Union’s executive arm has proposed an unusual new tax: a levy on the revenue (not the profit) of technology companies. Many EU countries say the tech industry isn’t paying its fair share to public coffers, and the effort to crack down on tax-avoidance schemes has led to large bills delivered in recent years to Apple Inc. and Amazon.com Inc. The idea behind the new tax is to focus on where tech users are based, rather than where a company chooses to place its European headquarters.

If Facebook sold an ad based on its users in Brussels, say, it would pay the tax in Belgium. Under the proposed plan, the tax rate would be 3 percent of digital-services revenue. That could yield about 5 billion euros in new tax revenue a year.