EU weighs broad corporate levy to raise revenue and capture large tech groups

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EU weighs corporate tech levy

Highlights

European Commission considering revising the Core corporate levy to focus on very large companies, targeting groups like Apple, Meta and Google for higher revenue.
Possible changes would raise thresholds to exclude medium-sized businesses and apply the levy across all sectors, but require approval from all 27 EU countries.
The new tax is part of five proposed EU own resources aiming to raise approximately 60 billion euros yearly from 2028 to fund joint budget priorities.

Tax design shifts as budget pressure grows

As first reported by the Financial Times, the European Commission is considering changes to its existing Corporate Resource for Europe, or Core, proposal so that it focuses on very large companies rather than a wider pool of businesses. Officials cited by the newspaper say the aim is to collect more revenue from groups such as Apple, Meta and Google without introducing a pure digital tax.

Under the current proposal, companies operating in the EU with annual revenue above 100 million euros would pay a yearly lump-sum contribution. Officials argue that changing the thresholds and contribution levels to concentrate on only the biggest corporates would both increase the take from large technology groups and ease criticism that the plan would also burden medium-sized European businesses.

The revised levy would apply across sectors rather than only to digital services companies, although the details are still being discussed. Any change would still require the backing of all 27 EU countries, and officials say support could improve if medium-sized businesses are excluded from the measure.

U.S. tensions and member state politics shape the debate

The tax discussions are unfolding as global efforts to make multinationals pay more tax where they generate sales have stalled. A 2021 OECD-brokered agreement has effectively lost momentum after Donald Trump's re-election in 2024, according to an EU official cited in the report, leaving Brussels more cautious about tax models that single out digital groups.

That caution reflects concern over U.S. retaliation. France, Italy, Spain and Austria already have national digital services levies and have faced Section 301 investigations from the U.S., raising the prospect of retaliatory trade tariffs.

Core is one of five proposed new EU "own resources" intended to raise about 60 billion euros a year for the common budget from 2028. A European Commission spokesperson says the institution is ready to support the EU Council and European Parliament in reaching agreement on the package this year, calling it essential for financing the bloc's joint priorities over the next decade.

Our earlier article on Malaysia’s tax reform and Budget 2027 plans looked at how the government aims to strengthen revenue collection while keeping the system competitive for investment. It highlighted the role of e-invoicing and data-driven compliance in boosting tax receipts, alongside discussions of a hybrid SST-GST approach designed to reduce cascading taxes without creating excessive complexity.

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