May 29, 2025

Germany mulls 10% tax on large online platforms, heightens trade tensions

Investing.com -- Germany is contemplating a 10% tax on major online platforms such as Alphabet (NASDAQ: GOOGL )’s Google and Meta’s Facebook (NASDAQ: META ), according to the country’s new culture minister, Wolfram Weimer. This move is expected to escalate trade tensions with the Trump administration.

The tax proposal comes as Chancellor Friedrich Merz is predicted to visit Washington soon for a meeting with U.S. President Donald Trump. Although the trip hasn’t been formally announced, Trump has previously stated that he won’t allow foreign governments to exploit America’s tax base for their own advantage.

Weimer revealed that his ministry is working on a legislative proposal while also initiating discussions with platform operators, which he accused of "cunning tax evasion". He proposed alternative solutions such as voluntary contributions. In an interview with Stern (AS: PBHP ) magazine, he criticized these corporations for generating billions in profit in Germany, benefiting from the country’s media, cultural output, and infrastructure, yet paying minimal taxes and giving little back to society.

The German government’s ruling parties agreed earlier this year to impose a digital services tax. If implemented, Germany would join other countries such as Britain, France, Italy, Spain, Turkey, India, Austria, and Canada, which have already imposed a tax on sales revenue generated by digital service providers within their borders.

During Trump’s first term, the U.S. Trade Representative’s office initiated a Section 301 investigation into unfair trade practices against several of these countries, concluding that they discriminated against U.S. companies. This led to the imposition of retaliatory tariffs on certain imports.

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