Google rate: what it is and what consequences it can have

If you read the news with some regularity, surely you have occasionally come across the term Google Rate, which is gaining a certain notoriety in these past weeks. By its name we can get an idea about what it can be, but for many it is not entirely clear. Here we tell you all about this concept.

Index of contents

Google Rate: What it is and what consequences it can have

Since weeks ago it is said that the Spanish government has plans to introduce it. What consequences can it have if this happens? This is something to which we will respond below, to make it clearer to you what we are talking about.

What is the Google Rate

The Google Rate is also known as the Digital Rate. It is a tax intended to fight against tax avoidance by large technology companies, such as Google or Facebook. It was raised by the European Commission to tax certain income from these companies. Since in the past this type of companies have been accused on multiple occasions of paying very few taxes.

Spain is one of the countries that has worked on the implementation of this Google Rate. It was in October 2018 when a bill was introduced, called the Tax on Certain Digital Services. It is intended for those technology companies that reach a turnover of more than 750 million euros worldwide and above three million euros in the case of Spain.

When will it be introduced

Apart from Spain, the United Kingdom was the only country in Europe that has gotten to work with a tax based on or inspired by this Google Rate. Finally, France was introducing a few weeks ago with a similar rate, in a move to put pressure on the United States, but it is an official thing that is already in force. Many countries wait for an international agreement in the first place, before making this decision.

Spain seems to be interested in introducing this Google Rate whether or not there is an international agreement. These days, several media are already talking about these government plans. Although the current political blockade is something that continues to constantly delay its official introduction. So at the moment there is still no specific date.

As soon as this political blockade in Spain is resolved, there will be more movements about the introduction of this tax in the country. But this is something that could take a while, so it may take a few months until it's finally official.

What consequences can it have

Some companies like Amazon have not been long in this regard. France already has its own Google Rate recently. In this case, the sales giant has confirmed that it will be the consumers who end up paying that tax, since they will pass it on to them. They will adjust the rates of their sales on their French website. It would not be strange that in the case of Spain the firm bets on making the same decision. Although we will have to wait for it to finally be implemented.

It is probable that some companies follow the example of Amazon and it is the customers who end up assuming these costs, with a rise in prices for example. Netflix is ​​another of the firms in the spotlight, so it would not be unusual if your monthly fee ends up increasing, as a way of facing this additional cost. It is one of the options that are most considered in this type of situation.

Although there are still many doubts with the alleged consequences of the Google Rate. It is requested that there be a global agreement on tax issues, to avoid this type of tax. But this is something that has not happened so far, nor does it look like it will happen soon. So it is difficult to know what will happen. More countries are likely to end up adopting this tax.

It will be interesting to see how this story evolves in the coming months. Also in the case of Spain, which seems to be very clear about the introduction of this Google Rate, no matter what happens worldwide. So it may be official in a few months.