The two-day meeting of EU Finance Ministers had ended on September 8. A notable achievement of the meeting was the progress of EU's negotiations on taxation of large multinational internet-based companies. If it is planned to reach an agreement on the issue of technology tax on internet-based companies by the end of this year, this is likely to be a landmark decision.

In March of this year, the European Commission announced a proposal to impose a 3% temporary tax on large internet-based companies with annual global incomes of more than €750 million and annual revenues of more than €50 million in the EU. The proposal is expected to affect 150 of the world's largest technology companies, including Google, Facebook, and Amazon. According to the new legislative proposal, any EU member state can tax the profits generated through internet operations occurring in its territory. Under the current regulations, internet-based companies only need to pay taxes for one time in their headquarters. At the EU finance ministers' meeting, EU governments agreed that tax rules should be changed to increase the tax on digital services that are currently under-taxed. If the EU member states uniformly levy a technology tax, the annual fiscal revenue can increase by a total of €5 billion.

However, there are still different opinions on how to achieve this goal. Currently, countries including Austria, France, Spain, Italy, and Germany intend to promote the 3% tax plan. These major European countries believe that the internet technology giant has transferred taxable profits to low-tax countries, there are millions of euros in tax losses, and hopes to introduce a solution as soon as possible. French Finance Minister Bruno Le Maire also said that Europe is not using technology tax to attack Google, Amazon, and Facebook. "You have internet giants which do not pay the same level of taxation as our own SMEs (small and medium-sized enterprises)," Le Maire told reporters during a press conference. "We can no longer accept to have our SMEs paying 40 points more of taxation than Google, Amazon or Facebook."

But countries including Ireland, Sweden, Finland, Denmark, and Malta have expressed strong reservations. These countries are generally low-tax small countries. Because they have large U.S. multinational companies in their territory, they hope that EU reform can be integrated with the global technology tax system. The Irish Finance Minister said that he is worried about the unilateral EU technology tax, and these measures will send out "wrong signal at global level". Finance ministers from the small countries also warned that the tax plan might make the EU and international practices out of sync, thereby undermining transatlantic relations (for instance, U.S.-Europe relations), making it more difficult for global technology tax reforms to reach consensus.

The EU levying technology tax on multinational Internet companies is a strong signal that state organizations are establishing borders against the internet giants.

The history of global internet development tells us that if a country does not deliberately use powerful means to "block" the internet, then the internet can do everything. Those countries that have a leading edge in technological innovation and industry leadership in the internet world will have the ability to build great asymmetric advantages; the tech giants that use the internet to build a powerful platform will have near-monopoly power. For example, the U.S. internet giants Google, Facebook, Amazon, Netflix, and others, all of them have near-monopoly control in their respective fields. What is more remarkable is that in the era of Big Data, with the enhancement of personal information collection and control capabilities, the internet giant's understanding of public information has greatly exceeded that of the normal business scope, and their business expansion has far exceeded other internet-based companies in the past. These giants are not merely technology companies, but also information companies with large amounts of data and processing capabilities, or financial companies with strong penetration capabilities. Internet giants are becoming all-encompassing without boundaries.

Jack Ma is well aware of the expansion of internet-based companies. In 2013, he once said, "in the Age of Information, especially when the Age of Data arrives, everyone must understand the truth that when you reach a certain scale, you must be a social enterprise and a provider of public social services; if not, this will destroy yourself." Jack Ma's sober reflection shows his concern about the expansion of the internet giants, and also implies that he is worried that the government will one day try to "clean-up" the internet giants.

Now, the governments will soon take action, and the breakthrough point will be chosen on the issue of tax payment. The internet-based companies business is ubiquitous and transnational, but the taxation of internet-based companies is generally paid at where they are registered, which is considered to be unfair. In July of this year, in a 5-4 decision, the U.S. Supreme Court ruled that all states have the right to tax the cross-state sales of internet e-commerce companies. The U.S. President Donald Trump also used Amazon as a criticism target to levy internet sales tax in the United States. The British Chancellor of the Exchequer Philip Hammond also said that he is strongly considering introducing a so-called "Amazon tax", mainly targeting online retail platform. If there is no international cooperation at the moment, Britain will promulgate temporary taxation measures to rebalance the online and offline retail industry.

The "good days" of internet-based companies' uncontrolled expansion will probably come to an end soon; more and more countries are using taxation as a breakthrough point to set the boundaries for the expansion of internet giants. These internet giants' development model may need to be changed soon.