The European Union is set to propose a 3% tax on digital revenue this coming week, hitting U.S. tech giants such as Apple (AAPL), Facebook (FB), Google-parent Alphabet (GOOGL) and Amazon (AMZN). The European Commission will propose a tax on digital revenue on March 21, according to several media outlets. That follows earlier reports over the past few months suggesting the EU's executive arm was planning some sort of digital tax. If true, that would raise trade tensions with the U.S. on the heels of President Donald Trump imposing steel and aluminum tariffs. The digital tax, falling on companies with global revenues of 750 million euros ($930 million) or more, would have three parts. It'll tax advertising revenues from the likes of Google, Facebook and, increasingly, Amazon. It'll tax the sale of digital data to third parties. It'll tax fees from "intermediation services" from online marketplaces in which users buy and sell goods and services directly but pay fees to the digital platform. That will include Airbnb, Uber, eBay (EBAY) and, via its third-party merchants, Amazon. It likely would cover Apple's revenue from its App Store. Online media and content creators, including Netflix (NFLX) , should be exempt. By targeting revenue vs. profit, the EU aims to prevent global tax giants from avoiding taxes. But taxing revenue would be especially painful for money-losing companies such as Uber or those with low margins such as Amazon. And the tax would fall primarily on U.S. tech and internet giants, something that will not go over well with America. "The U.S. firmly opposes proposals by any country to single out digital companies. Some of these companies are among the greatest contributors to U.S. job creation and economic growth," Treasury Secretary Steven Mnuchin said in a Friday statement before a meeting with Apple CEO Tim Cook The European Union, which has few large consumer internet companies, has been increasingly aggressive vs. U.S. tech giants. The EU recently imposed a big fine on Google over search results and ordered Apple to pay a big back-tax bill to Ireland. The European Commission's proposal would need approval from all 28 European Union countries, with low-tax havens such as Ireland likely to object. So the policy may never pass or face major revisions. However, the large European countries such as France and Germany could go ahead on their own, amounting to largely the same policy. The U.K. previously opposed a digital tax but has signaled it'll adopt a policy after leaving the EU. The European Commission will describe the 3% digital tax as an "interim" measure. One goal is to create momentum for a global solution on digital taxes. YOU MIGHT BE INTERESTED IN: These 5 Stocks Have Dipped Below Buy Points, But Don't Give Up On Them Why These 9 IBD 50 Stocks Are Less Likely To Be Gouged In A Trade War Q1 Earnings: Who Joins Netflix, Twitter On List Of Stocks Expecting 50%-Plus Growth? The Big Picture: This 'Bear' Hit 10 Years Ago; How Are Stocks Now
Apple is considering putting a 3% tax on digital revenue, potentially hitting the likes of US technology firms Apple , Facebook , Alphabet , Apple , US and Trump . Such a proposal, if adopted, would raise trade tensions with the Alphabet as the Trump administration prepares to slap tariffs on steel and aluminium imports.