The Google Tax that Spain imposed (like other European Union countries) on the US tech giants was one of the great diplomatic crises between our country and the American country in recent years. First with Donald Trump and then with the current president Joe Biden who did not see this extra tax on American companies with good eyes.
Well now there is a truce and both countries have shook hands. Spain, along with other countries (France, Italy, Austria and the United Kingdom) that had imposed this rule unilaterally have reached an agreement with Washington to maintain the Google Rate at least until 2023. And furthermore, The United States is going to eliminate the tariffs it had created in response to companies from countries like Spain.
In June the Biden government had temporarily suspended them for 180 days while it promised to negotiate with the countries that have the Google Tax and now, after the last agreement, they are eliminated indefinitely.
Meanwhile, before 2023, all these countries should develop an agreement that is multilateral and that is already being negotiated within the Organization for Economic Cooperation and Development (OECD) and the G-20.
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Progress towards global tax agreements
It should not be forgotten that just a few days ago, in the same month of October, the OECD announced an agreement that added 136 countries, including all the G-20 countries, to create a global pact to apply a 15% global tax on the profits of multinationals from 2023. Even Ireland, which operates as a tax haven within Europe for technology giants such as Amazon, Google or Facebook, accepted this agreement.
Even so, countries of great size and strong for the global economy such as Nigeria, Pakistan, Sri Lanka or Kenya have decided not to be part of this agreement.
In addition to raising the tax rate, the OECD agreement talks about global companies paying taxes in the countries where they sell their products or services, even if they do not have a physical presence in them. Now, companies like Google, Apple or Facebook, even if they have clients in Spain, pay their taxes in Ireland because that is where their central office is present to operate throughout Europe.