Alphabet’s Google and Microsoft’s Bing, along with other search engines, could see extra levies under the latest rewrite of the global tax policy by the Organisation for Economic Co-operation and Development (OECD).
The tax policy for internet companies -- which is spearheaded by the OECD, which aims to promote policies that will improve the economic and social well-being of people worldwide -- could be written into the April 2018 interim report to the Group of 20s finance ministers on tax and the digital economy.
Determining taxes for internet companies is a top OECD priority -- and a complex one, as some countries have already taken action on their own to collect tax, according to Bloomberg.
An email sent to Bloomberg on Wednesday from Giorgia Maffini, deputy head of the OECD’s tax policy and statistics division, explains that the organization "will be considering" a levy for search engines.
Search engines have touted exchanging their free services for consumer agreeing to opt-in and provide data, but this exchange of information for services could be the very fodder that will initiate the tax.
"Under the U.K.'s value-added tax laws, barter transactions typically occur when businesses exchange goods or services," reports Bloomberg. One could argue that a VAT charge should be applied to search engines, Bloomberg writes, citing the Treasury’s paper.
Some countries have already begun to collect taxes. The UK in 2015 introduced a "diverted profits tax" after Alphabet and others engaged in "aggressive" tax plans, shifting profits overseas. Then India in 2016 began to levy online advertising revenue of foreign ecommerce companies and Australia in July 2017 began to enforce a diverted profit tax.