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What is the Google Rate that the Government has Just Approved?

The Council of Ministers held today has approved the “Google Rate” and the “Tobin Tax”, with which it is estimated that 2,000 million euros will be collected in taxes.

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The Council of Ministers held today has approved the “Google Rate” and the “Tobin Tax”, with which it is estimated that 2,000 million euros will be collected in taxes. The second one taxes the financial transactions of the sale of shares, but the first, as already indicated by its own name, directly affects Internet companies.

“Large Internet companies will have to pay 3% of what they bill for online advertising services.”

What is the Google Rate? Let’s explain it in this article. The Google Rate will affect the large digital multinationals, those with a global turnover of more than 750 million and a turnover in Spain of more than 3 million.

These companies will have to pay a tax rate of 3% in relation to online advertising services, online brokerage services and the sale of data generated from information provided by the user during his activity or the sale of metadata.

That is, it will not affect a web page that sells products on the Internet, for example, but will do so to those platforms that collect information and data from users and that offer advertising services or commercialize that information.

This puts in the spotlight to companies like Google -who names the rate- but also to other companies such as Facebook, Amazon or Cabify and Uber type services, as well as accommodation and tourism platforms such as Airbnb or even search engines like Booking.

The rate has been approved today after having submitted the preliminary bills, approved in October, to a public consultation and with it the government expects to collect 1.2 billion euros annually.

The approved measure seeks above all to ensure that large Internet companies tax beyond where they are offering their services, since they sometimes locate their tax offices in other territories to evade the payment of certain taxes.

It should be noted that Spain is the first country in the European Union that has approved it, although other nations such as France and the United Kingdom are also in the process of doing so.

In any case, it still remains for its application, given that after approval by the Council of Ministers, now both the Google Rate and the Tobin Tax will be remitted to Congress to approve the bill. This process may take about six months. Once it is published in the BOE, its effective application will arrive three months later.

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