Governments will gain more power to tax major multinational companies — including Silicon Valley behemoths — for conducting business in their countries under a proposed overhaul of cross-border tax rules released by the Organisation for Economic Cooperation and Development.
The proposal, unveiled on Wednesday, comes amid growing tensions between the United States and other countries over digital taxes that mostly take aim at American tech giants, including Amazon, Google and Facebook.
Salesforce co-CEO Marc Benioff spoke to FOX Business' Maria Bartiromo about the effort behind breaking up big tech companies.
"Facebook is the new cigarettes."
"It's addictive; it's bad for you," Benioff told FOX Business. Facebook wants "your kids. Now, they're posting political ads with incorrect information. They're passing your information to 50,000 other companies — you don't even know what's happening."
Benioff said with Facebook buying apps like WhatsApp and Instagram, it has them comingled in lots of companies.
"They're creating market segments called 'the persuadables' and shifting elections based on that data," Benioff said. "That's not good. Nobody wants that.
"We want a society based on trust and truth."
"That's so important, and this is something we all need to be committed to," Benioff said. "We have to focus on trust as our highest value."
Under the new rules outlined by the Paris-based organization, countries would have the capability to tax digital companies based on sales, rather than physical presence. This is because digital companies don’t require a physical presence to run their business within a certain country, so they benefit from the current system that taxes them based on the location of their operations and assets and not where their sales are generated.
According to a recent European Union report, digital companies pay, on average, half of what their traditional brick-and-mortar counterparts do in taxes — even as their revenue expands four times as fast as revenue for other multinational companies.
FOX Business' Megan Henney contributed to this report.