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EU eyes 3 percent tax on tech giants' revenue

EU will reveal the digital taxation proposal on March 21, reports say.

Digital tech companies operating in the European Union could face a 3 percent tax on gross revenues, a European Commission draft proposal obtained by Bloomberg says. Earlier drafts proposed a levy in the 2 to 6 percent range as EU countries explore new ways to tax giants like Alphabet and Facebook.

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According to the new draft, tech companies with worldwide total revenue over €750 million ($920 million) and total taxable annual revenue from offering digital services in the EU above €50 million will be subject to the levy. It will be raised against advertising revenues, revenue from users and subscriptions to services, and revenue from selling data to third parties.

The European Commission is expecting to raise €5 billion a year from the tax, according to draft proposals also viewed by Financial Times. The draft, expected to be proposed March 21, will need unanimous support from the EU's 28 members to go into effect.

Responding to questions over the levy not being high enough, French Finance Minister Bruno Le Maire said earlier this month: "It's a starting point. I prefer a text that will be implemented very quickly rather than endless negotiations. We will fine tune it later."

EU countries like Ireland with low tax rates could push back at the levy, as they're a tax-haven favorite of tech companies.