EU Weighs Tax on Largest Companies Across Sectors to Increase Burden on US Big Tech

The European Union is considering a tax plan that would apply to the largest companies regardless of sector. The proposal would increase the tax burden on US Big Tech while reducing criticism that digital companies are being singled out and lowering the risk of US trade retaliation.

The European Commission is discussing adjustments to the tax threshold and levy under the Corporate Resource for Europe, or Core, which it has proposed as a source of joint budget funding, the Financial Times reported on October 7. Under the current proposal, companies with annual revenue of more than 100 million euros operating in the EU would pay a fixed annual levy.

The commission is considering raising the revenue threshold to exclude mid-sized companies while adjusting payments for the largest firms. The goal is to collect more revenue from companies such as Apple, Meta and Google, while easing objections from member states that say the burden is too heavily concentrated on Europe’s mid-sized businesses. Specific thresholds and amounts have not been determined.

Applying the measure across multiple industries rather than limiting it to digital services reflects concern about possible US retaliation. The US is investigating France, Italy, Spain and Austria under Section 301 of the Trade Act over their digital services taxes. Some EU member states also oppose a separate digital tax because they fear conflict with the US.

The need to raise funds is also supporting the discussion. Member states have limited fiscal capacity, and international negotiations on taxing multinational companies have stalled. Core is one of five new levies the EU plans to introduce from 2028. Together, the bloc aims to raise about 60 billion euros a year from the measures.

Still, adoption would require unanimous approval from all 27 EU member states. Most currently oppose the existing Core proposal because of concerns that it would weaken the competitiveness of European companies. The commission believes excluding mid-sized companies from the tax base could broaden support, though it remains unclear whether member states can agree on a revised plan.

A European Commission spokesperson said the body is ready to support the Council of the European Union and the European Parliament in reaching agreement on the new own-resources package within this year. In upcoming negotiations, the levy level for the largest companies, the impact on European corporate competitiveness and the US trade response are set to be the main issues.