June 14, 2021

What is the Google Rate and how it will affect us

According to María Jesús Montero, the Google Google Rate ’is ready to be approved and has passed all the appropriate procedures.

The world of the economy is being digitized by leaps and bounds. Businesses are based on distance activities, without having a physical presence in most countries where they sell their goods and services. He has been talking about fees and taxes for a few years to regulate this activity, but since Tuesday they are a reality, when the Government said that it would get to work with two new taxes to the technology and banking sectors.

The Minister of Finance, María Jesús Montero, said on Wednesday that the To Tobin Rate ’and the Google Google Rate’ are ready to be approved by the Council of Ministers. The Tax on Certain Digital Services, or ‘Google Fee’, is a new tax where the Government of Spain will obtain benefits from large technology companies for online advertising services and sale of data from information provided by the user. The tax will affect companies that invoice 750 million euros worldwide and 3 million in Spain. Some of the companies affected will be Facebook, Amazon or Google, hence the name of this tax; Wallapop, for example, would be exempt, by billing 3 million euros in Spain, but not the 750 million worldwide required.

This rate will order companies to pay taxes where they generate benefits, not only where they have a physical presence, since it is usually in countries with lower taxation. This will make many companies that, until now, do not pay taxes in Spain, do so. The ‘Google Rate’ will tax 3% of the income generated by these companies and it is expected to obtain a profit of 1,200 million euros that the Government has already included in the 2019 State General Budget project, although the EU left it at 546 , less than half. In PwC, finally, it was declared that the benefits would be 968 million, due to some aspects that were not taken into account in Brussels. As for consumers, this 3% will mean higher prices that will be reflected in lower sales and, of course, lower profits.


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