Germany to tax online platforms like Google, Meta and Apple

The German government has announced it is drafting a law to tax major international technology companies, including Google, Apple and Meta. Culture Minister Wolfram Weimer accused US tech giants of “cunning tax evasion”.

Germany planning 10% tax on tech giants

Germany’s Federal Culture Minister Wolfram Weimer (CDU) has announced that the federal republic is drafting a law which would tax 10 percent of profits made by large digital companies which use media content on the internet and operate in Germany.

"[Alphabet/Google, Meta and Co] do billions in business in Germany with extremely high profit margins and benefit enormously from the country’s media and cultural output as well as its infrastructure - but they pay hardly any taxes, invest too little, and give far too little back to society," Weimer said in an interview with the German magazine Stern.

The minister accused tech giants of “cunning tax evasion”. Currently, many US tech companies establish local European branches in countries with low corporate tax rates, such as Ireland, and declare their European profits from these addresses.

While the EU put plans for a bloc-wide digital services tax (DST) on ice in 2021, many countries have adopted domestic policies for taxing tech giants. If Weimer’s draft law is passed, Germany would join Britain, France, Italy, Spain, Turkey, India, Austria, and Canada in the list of countries with a digital services tax.

While Weimer didn't give a revenue forecast for the 10 percent tax, France's 3 percent DST has seen the country generate millions in revenue. The minister explained that Google and other industry representatives had also been invited to a meeting at the German chancellery to discuss alternative, “voluntary commitments”. 

DST may be used as bargaining chip in negotiations with US

Weimer’s announcement comes as Chancellor Friedrich Merz (CDU) is expected to meet with US President Donald Trump on a trip to Washington, and Germany's DST plans are likely to be a hot discussion point.

During Trump’s first term, the US Trade Representative’s office opened an investigation into countries suspected of imposing unfair trade practices against the US. The investigation found that several countries which imposed domestic digital services taxes on the US had unfair trade practices.

According to Reuters, in February, Trump ordered investigations to be revived, with a particular aim of imposing tariffs on imports from countries that have a digital services tax on the US.

Ahead of his trip, Merz seems steadfast nonetheless. Speaking at the Europaforum conference in Berlin last week, the self-proclaimed transatlanticist echoed Weimer with a more diplomatic tone: “We are very easy on American tech companies in terms of taxes. It doesn't have to stay that way [... ] I don't want to escalate this conflict. I want us to resolve it together."