The Treasury wants to know where the technology customers are in order to collect the ‘Google Rate’: it will use the geolocation of the devices
The government offensive to tax the digital services of multinationals in the countries in which they operate continues. Following the announcement by the European Union that will force, directive through, large companies to declare country by country their profits and the G7 agreement for these companies pay at least 15% corporate taxes in the states where they do business, the Government of Spain has published today in the Official State Gazette (BOE) the incorporation of some additional articles to the Tax Law on Certain Digital Services, popularly known as ‘Google Rate’, to optimize the tracking of clients served by technology multinationals.
With this measure, the Spanish Tax Administration wants to know in detail the number of clients that large technology companies have in our country to collect the fee in relation to the services that they effectively provide within our borders.
The extension of the law of the ‘Google Rate’ specifies that to tax digital services it is necessary to establish where they have been provided, and that from now on they will be understood to be carried out in the territory of application of the tax when the user is physically there . To this end, the Government indicates that the different geolocation technologies of the clients’ devices will be used.
Companies that have to pay the ‘Google Fee’ They must specify the processes, methods, algorithms and technologies used to collect the location of each service provided in a quarterly descriptive report. That they must keep and make available to the Treasury whenever it requests it. In this way, the Government will not only obtain the tax information it needs, it also ensures that the mechanisms used to obtain this data comply with current laws. In addition, the companies will have to keep a quarterly record of the operations that, likewise, they will have to keep and deliver to the Administration when requested.
This extension also specifies the information that the four digital services subject to the tax will have to store: online advertising, online intermediation services in which there is facilitation of deliveries of underlying goods or services directly between users, other online intermediation services and data transmission services.
In the case of online advertising, for example, the record will have to contain data on total income derived from advertisements in Spain, their number of appearances on devices that are in our territory and the number of times it has appeared on any device, no matter where they are.
It should be remembered that the Law on Tax on Certain Digital Services, published in October 2020, levies a tax of 3% of the income obtained in Spain to all those multinationals that invoice more than 750 million euros worldwide and more than 3 million euros in our country. According to the Government’s forecasts, with this rate the public coffers could collect some 968 million euros during 2021.