(This is a shortened, English version of two stories published by Di Digital on 15 May.)
In a letter to Sweden’s finance ministry last year, the streaming company's tax director expressed concern over individual countries ”going 'rogue'” to tax digital businesses rather than awaiting the OECD’s conclusions on how best to tax multinational companies.
Spotify has joined the Digital Economy Group, which represents ”leading US and non-US” tech companies in fighting unilateral taxes on foreign companies in several countries.
In Indonesia, companies which sell services digitally risk being taxed as though they had a physical presence in the country, a proposal the Palo Alto-based lobbying group opposes.
Tax initiatives aimed at digital businesses in Australia and Malaysia as well as the United Kingdom’s ”Google tax” on profits shifted abroad have also drawn criticism from representatives of the Digital Economy Group.
Spotify’s lobbying efforts aim to ensure that companies do not act on their own before the OECD has finalised its project on base erosion and profit shifting (BEPS).
”We need rules that are widely agreed and uniformly applied, which is why we support the OECD's BEPS initiative to create consensus behind a coherent global tax system that encourages innovation,” a Spotify spokesperson told Di Digital.
For Spotify, which has declared losses during throughout its ten years on the market, withholding taxes in large markets could deal a blow to the company’s hopes of turning a profit. The company is planning a listing on the New York stock exchange, a spokesperson recently told the Financial Times.
"Spotify is proud to pay its taxes and works actively with governments and international organisations all over the world, including the OECD, to help them eliminate aggressive tax avoidance,” the spokesperson added.
”Setting a global tax framework that supports the growth of the digital economy, whilst ensuring all multinational companies pay their fair share of taxes, is critical for all countries.”
Meanwhile, documents from Cyprus show that Spotify's CEO Daniel Ek established a holding company in the country in 2011. Cyprus is considered a tax haven by several US states.
Daniel Ek's co-founder Martin Lorentzon established a holding company in Cyprus in 2005 shortly before establishing Spotify, which is headquartered in Luxemburg.