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Spain wants to tax Whatsapp, Google and Telegram as phone operators

Spain will seek to tax all companies that operate telecommunications services, such as calls and instant messaging, according to Telecommunications Secretary Roberto Sanchez.

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Under a new law proposed by the government, “all operators who provide telecommunication services without having to provide phone numbers, such as WhatsApp” and Telegram would have to register as telecommunications operators and would be taxed based on revenue, Sanchez said in a press conference. Currently, only phone operators that can provide phone numbers need to sign up as telecom operators, he said. Under the proposed rules, which would require parliamentary approval, internet companies such as Alphabet Inc. and Facebook Inc., the owner of WhatsApp, would have to disclose their sales from messaging services in the country, he said.

For a tech giant like Facebook, sales are largely driven by advertising. Given WhatsApp generates little revenue for the company, the impact in the short-term would be small if the law were to pass, said Ivan Feinseth, chief investment officer at Tigress Financial Partners.

The measure could turn out to be hard to implement, however, given that apps like WhatsApp – one of the world’s most popular messaging services – does not generate much money for its owner Facebook. The US tech giant acquired the messenger in 2014 for a whopping $19 billion.

While the services are mostly free for now, this may not last forever, the Spanish minister noted, stressing that it is vital to incorporate those new “operators” into the regulations as soon as possible. Notably, Facebook has long been considering plans to monetize WhatsApp – from now-abandoned advertisement initiatives to getting fees from in-app payments.

The proposed tax is in line with a broader European initiative to charge American internet giants for revenues generated locally. Spain has already drafted a three-percent tax for firms such as Facebook, Alphabet, Apple and Amazon. The levy will not be implemented until December, when members of the Organization for Economic Cooperation and Development (OECD) are expected to reach an agreement on a joint tech tax.


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