The Story:

Israel intends to send tax bills to Google and Facebook with a year, says a Wednesday report in TheMarker. In light of the EU’s recent $14.5 billion back-tax bill handed to Apple earlier this year, Israel’s move is being seen as a concerted effort to get the Internet giants to be bigger taxpayers than they currently are.

What’s going on?

The chairman of Israel’s Tax Authority, Moshe Asher, according to the report, said that they’ve already started preparing the tax bills, and are in the process of figuring out the basis for their calculations.

Essentially, that means the authority has to figure out how much of the companies’ earnings from Israeli customers should be considered taxable income.

Why now, you ask?

There is growing concern around the world that tech giants, who make billions of dollars in profits each year, are funneling the profits they make in one country to another country where the tax rate is lower. According to a study by the European Parliamentary Research Service, corporate tax-dodging costs the EU a whopping $54.5 billion to $76.4 billion a year.

As the tech giants keep getting bigger, fatter and keep reporting double-digit revenue growth, countries around the world are slowly realizing that they need to get their fair share of the loot. And the European Commissioner for Competition has shown them it can be done, and how.

 

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