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How does the ‘Google rate’ influence your startup?

Surely you have heard of the so-called ‘Google rate’, a tax that is being carried out by the Government to obtain money from the activities carried out by the big technology companies in our country.

So far the bill has been approved in the Council of Ministers, this means that it is still necessary for the Congress and the Senate to give their approval, something that will last a few months.

The Administration wanted to take the initiative by drafting the first international tribute on the digital economy, a business that is very difficult to limit in a single country and with which it intends to raise 1,200 million euros.

What is the ‘Google rate’?

It is popularly known by this name to the Tax on Certain Digital Services, a tribute through which it is intended to obtain money from technological giants. The purpose of the lien is that these companies pay where they get their benefits.

The goal of the ‘Google rate’ is for digital companies to pay where they get their benefits

Do not forget that the majority of this type of organizations has decided to locate their tax offices in those European countries where taxation is lower, and therefore beneficial in their income statement.

Spain intends to receive compensation for the transactions of these companies that operate within our borders, such as Google, Facebook, Apple or Amazon. The idea is to collect those activities that until now were outside the Spanish fiscal framework.

To whom?

The ‘Google rate’ is intended for “online directed advertising services, online brokerage and the sale of data generated from information provided by the user. That is, an advertising service that has studied the tastes of the consumer, “says Isabel Celaá, spokesperson for the Government of Spain. This is the case of Uber, Airbnb, Cabify, Google or Amazon.

The ‘Google rate’ is intended for online directed advertising services, online brokerage and the sale of data generated from information provided by the user. Click to tweet

This regulation will affect large companies that bill more than 750 million euros a year, and more than 3 million euros in Spain, so SMEs and small startups will not be exempt.

Will also be out, companies that are dedicated solely to online sales such as Zara or El Corte Inglés. In addition to those that are dedicated to the sale of goods and services between different users, such as eBay or Wallapop.

How much will they pay?

The tax rate in which the ‘Google rate’ is raised represents 3% of each online advertising operation, data sale, or intermediation carried out by the company.

What do the technological ones think?

The ‘Google rate’ has not been very well received by technology companies, as expected. The Association of electronics, information technology, telecommunications and digital content companies (AMETIC) affirms that this tax will have a detrimental impact on the Spanish economy, mainly on SMEs, startups and consumers. It is predicted an increase in the price of digital products and services that will affect all the companies that use them.

The AMETIC ensures that the ‘Google rate’ will have a detrimental impact on the Spanish economy

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They say that it will put Spain in a position of digital disadvantage compared to other countries and will be harmful for innovation and digital transformation. They argue that in a globalized economy this type of taxes should be agreed internationally and not unilaterally by a single country.

Also published on Medium.

Published inStartups

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