This paper is part of the book Capitalism in the Platform Age. Emerging Assemblages of Labour and Welfare in Urban Spaces


Digital platforms represent the technological infrastructure that has become so widespread in the organisation of production, in the transformations of work and in consumer choices that the term “platformisation of work”1 has been coined as part of the so-called “digital transformation”2 of society.

In the space of a few years, thanks to the technological acceleration in the field of computing, nanotechnology and algorithms an increasing amount of data—which today represents one of the most relevant sources of capitalist valorisation and accumulation—has been managed.

The pervasiveness of platforms has also invested the territories fostering a process of globalisation that transcends national borders, and a more efficient exploitation of new types of economies of scale. Communication and space thus become the flywheel of value creation that increasingly tends to manifest itself in the financial markets. It is therefore not surprising that the companies with the highest capital stock value trading on the New York Stock Exchange are precisely the giants operating in platform capitalism (the so-called GAFAM: Google, Amazon, Facebook, Apple, Microsoft).

Among the many questions that could be raised, there are two areas that require rather urgent answers, especially since platform capitalism has disrupted the traditional systems of taxation and public welfare. In this paper we shall focus on social protection, basic income and taxation.

  1. Platform work escapes traditional definitions. Current European labour law needs reshaping, since the traditional worker-employer relationship is no longer a direct relationship but it is intermediated by the algorithm (the platform). This applies to the worker, posing the problem of defining the degree of prescriptiveness and hetero-direction of the task performed. But it also applies to the so-called “prosumer”,3 i.e. the person who, by using platforms as a consumer, turns into a producer at the very moment when their data and the information provided trigger forms of “business intelligence” (collection, selection, standardisation, profiling, prediction, etc.). The transformation of data from use value to exchange value underlies the valorisation of digital platforms. A valorisation that escapes any fiscal control even more so if it is the result of a digital activity that is not considered productive and therefore not remunerated. The platformisation of work, the widespread precarity and the insecuriy of workers, as also the presence of “free digital labour”, lead to the need to redefine social protection criteria not only in terms of guaranteeing forms of income necessary for human life but also in terms of a fairer distribution of income from profits generated in the digital economy by the use of technologies themselves.
  2. Platforms offer in most cases intangible services, which escape the traditional forms of measurement since traditional taxation is still based on the taxation of production factors (labour and machines) and territorial (national) taxation. In the presence of digital platforms, production factors become less definable. In platforms, in fact, the control over production takes place through forms of flow control, expropriating the content through the role of intellectual property, outside the ownership of the means of production, which in most cases remain in the hands of the workers. Furthermore, productive activity has become transnational and thus poses the problem of its measurement. National tax systems lose their effectiveness and are not able to regulate this new type of economy in terms of fair taxation.

Labour and Social Protection

The most prominent element of platform work or “platformisation of work” is the way in which it often relies upon and expands a non-standard type of employment relation. Many countries legally recognise a binary idea of labour: either employed or self-employed. Whereas the employed are given rights and protections, the self-employed are deemed to be working for themselves and therefore do not enjoy the basic rights and protection of other “typical workers”.

Most notably, this is expressed for those deemed to be self-employed. As one study found, on average, 55% of self-employed workers in the EU lack unemployment benefits, 38% lack sickness pay and 46% of self-employed women lack maternity benefits. In contrast, only 0.1% of full-time workers in the EU lack these benefits (Forde et al., 2017).

Social protection has traditionally been designed around workers in standard employment and that has left non-standard workers with patchy coverage (Carter et al., 2019). Where the standard employment model is absent, workers may well find themselves unable to access the same social protections that are available to other workers.

With regard to clarifications on social protection and platform work, ILO has distinguished between four types of social protections: social protection linked to a contract with a specific employer; social protection linked to salaried employment; social protection linked to participation in gainful employment (including non-salaried employment) and social protection linked to residency status. Commonly, platform workers find themselves outside the formal classification of “worker” or “employee” that is used to determine access to social protection. As a result, platform workers are excluded from important social protections, such that they “bear the risk when there is insufficient work, when clients refuse to pay, when payments are low, or even for paying taxes to the government” (Forde et al., 2017).

The European Trade Union Confederation (ETUC) “in the past, has already underlined that self-employed workers lack adequate social protection, with notable disparities from one country to another. Full social protection rights such as health assistance, sick leave, unemployment or parental/maternity leave are usually responsibility of the self-employed workers themselves. Platform companies transfer the costs of the social protection, that they are not granting to their workers, to society as a whole. The present situation implies that companies that use the ordinary employment relationship are subsidising the platform companies; this could generate enormous pressure on the sustainability of the redistributive institutions that characterise the welfare state. There are also legislative loopholes that do not provide social protection for non-standard workers. As regards for non-standard workers and workers in platform companies (including the self-employed), a comprehensive approach should be taken in which non-standard workers enjoy the same protection as ordinary workers” (ETUC, 2020).

The Urgency of a New Approach. Guaranteed Minimum Income and Unconditional Basic Income

Social protection should be reshaped at a more universal level, as the report The Social Protection of Workers in the Platform Economy also suggests, (Forde et al., 2017) in order to reduce differences in treatment across different forms of work and to expand existing social protection schemes. This means recognising and ensuring: old age security systems for all workers, irrespective of formal status in employment law; continuity of social insurance and workers’ rights when moving from one job to another. In addition, a more universal social protection should aim to reduce or abolish requirements for continuity of employment for eligibility to social protection; promote systems based upon general taxation and promote universal benefits as part of social protection systems, which remove complex rules concerning eligibility. In the longer term, consideration should be given to how existing social protection schemes might be adapted to a growing variety of non-standard forms of work. This recommendation is in line with the aspirations and aims of the European Parliament’s Resolution on the Collaborative Economy (EP, 2017) and under the framework of the European Pillar of Social Rights (EC, 2017).

During the COVID-19 pandemic, the issue of lack of social protection became even more evident. Platform workers—as a result of their employment status as self-employed—have been excluded from sick pay, unemployment benefits and most government support schemes for COVID-19. Standard employees have seen extensions to sick and unemployment benefits, as well as the widespread adoption of various short-time work schemes. In the following paragraphs, we shall deal with the issues that are gaining ground in the political and public debate in terms of social protection, and, particularly, in relation to income guarantee measures. The introduction of forms of income support grew in intensity and visibility precisely during the lockdown period prompted by the COVID-19 outbreak (early 2020) when, in addition to the global health crisis, there was a deterioration of social and economic conditions all over the world. So much so that, according to the Living Paper Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures (Gentilini et al., 2020), as of 3 April 2020, a total of 106 countries have introduced or adapted social protection and job measures, 26% more than previous week, while the number of measures grew by nearly 50%, from 283 to 418. Within social assistance, cash transfer programmes remain the most widely used intervention in 71 countries. Added to this are the many pilot projects, the unconditional basic income experiments launched in many countries around the world (Fumagalli et al., 2021).

In order to provide a work tool, we shall give an overview of guaranteed minimum income and universal and unconditional basic income schemes so as to provide some food for thought on how to improve social protection.

3.1 Guaranteed Minimum Income

Guaranteed minimum income is a means-tested cash benefit provided by a government to all citizens, or residents, who are defined as needy or are at risk of poverty, either on individual or family basis. This measure often includes work-related requirements of some kind (such as that the recipient be engaged in a job search, job training, or community activities) as a condition of programme eligibility. In most of the cases guaranteed minimum income is a benefit with no expiration date and is paid “until the recipient’s financial condition has not improved” (BIN Italia, 2012). Its main goal is to guarantee citizens or families a minimum income to live a decent and dignified life. In addition to other forms of social protection for workers (such as unemployment benefits, health provisions, maternity/paternity leave), healthcare system and public education, it is one of the pillars of the European social model.

To be entitled to the unemployment benefit workers must have paid enough pay-related social insurance contributions, in case of guaranteed minimum income eligibility is associated with criteria defined in the provision for those who do not have sufficient means to support themselves. If the unemployment benefit includes a contributory regime (funded by workers’ and employers’ contributions), the guaranteed minimum income (non-contributory) scheme is funded by general taxation.

Eligibility is usually determined by a means-test which assesses the household’s level of income or assets against a defined threshold. The eligibility criteria also include that the recipient be engaged in a job search, and recipients usually stop receiving the benefit when they found a job. In some European countries, minimum income support schemes include assistance for other basic needs, particularly housing costs, health care, public transports, etc. In many cases, they focus on specific contingency or particularly vulnerable groups (Gobetti & Santini, 2018).

However, according to the report The platform economy and precarious work (Hauben et al., 2020), minimum income support schemes could be “highly relevant for platform workers for several reasons: the fragmented and unpredictable nature of the work, intermittency in service provision, the (very) low payments, and unstable and insecure income”.

In recent years, many EU resolutions4 have continuously focused on the importance of the minimum guaranteed income scheme in all Member States and the proposal for an adequate minimum income is one of the 20 European Pillar of Social Rights.5

3.2 The Universal and Unconditional Basic Income (UBI)

At the turn of the new Millennium both civil society organisations and national governments across the world have been debating over the idea of an economic right for all. Basic income pilots have been carried out both in small and big cities in South Korea, the USA, Canada and the EU, as well as in rural villages in Africa and in India (Fumagalli et al., 2021). The rise of the digital economy, along with the transformations of social protection models, the increase in precarious and flexible jobs, the advent of automation and the increase in the number of people in poverty or risk of poverty, have given greater visibility to the universal and unconditional basic income proposal. One of the main reasons for an unconditional basic income rests on the broadly shared idea that social justice does not only refer to the right to decent income, but also to the development of free human activities, as well as self-determination. Also, it refers to a new redistributive economic policy and a new concept of emancipation.

Here are the 5 Characteristics of UBI as defined by the Basic Income Earth Network (BIEN)6:

  • Periodic. It is paid at regular intervals (for example every month), not as a one-off grant.
  • Cash payment. It is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.
  • Individual. It is paid on an individual basis and not, for instance, to households.
  • Universal. It is paid to all.
  • Unconditional. It is paid without a means-test and without a requirement to work or to demonstrate willingness to work.

A wide variety of basic income proposals are circulating today. They differ along many other dimensions, for instance, the amounts of the income, the source of funding, the nature and size of reductions in other transfers that might accompany it, the targeted beneficiaries, etc. However, over the years, a certain uniformity has been achieved on what the key features are. A clearly written definition is provided by the most prominent advocate, Philippe Van Parijs, who defines it as “an income paid by a government, at a uniform level and at regular intervals, to each adult member of society. The grant is paid, and its level is fixed, irrespective of whether the person is rich or poor, lives alone or with others, is willing to work or not. In most versions it is granted not only to citizens, but to all permanent residents” (Van Parijs, 2001). Regardless of the differences among the various definitions, they all have in common the statement that “no conditions must be placed on recipients”.

According to UBI proponents, receiving a guaranteed and secure payment would not affect recipient’s willingness to work7; on the contrary, it would allow people to choose their job and professional career, thus fostering their participation in the labour market by increasing their bargaining power in relation to poorly paid or precarious jobs. Besides, it would recognise the added value of non-formal jobs (such as care work) and social activities not directly associated with employment. Many advocates argue that it has the potential to raise wages and they also propose the introduction of an hourly minimum wage. In order to respond to opponents of basic income who say it would foster laziness as people would prefer not to work, many supporters argue that as basic income is paid to both employed and unemployed people, it actually would guarantee a better financial position to recipients who do work rather than to those who do not.

Self-determination is another topic that sparked a global debate, in particular in relation to the gender issue thanks also to the involvement of feminist movements in the debate.8 In this case is seen as a tool for escaping from stereotyped family roles, dismantling the gender wage and employment gap, recognising reproductive work beyond formal work, and for the full recognition of freedom of choice. According to some (Flanigan, 2018), UBI can increase the power of women even within the household, giving them more autonomy and making them less dependent on men’s impositions. As Ursula Huws highlights, basic income was a demand of “Women’s Liberation Movement that called for ‘financial and legal independence’ for all women. The feminist logic underpinning this demand is powerful: not only is it degrading for anyone to have to beg or manipulate someone else for their means of subsistence, and materially damaging to that person if the money is not forthcoming; it also destroys the quality of human relationships if they are embedded in dependency” (Huws, 2020).

Another interesting aspect is that a universal basic income would also support those we define as prosumers, that is, those who thanks to the role of digital platforms and the increasing amount of data contribute to the creation of network value. A basic income could be introduced as recognition of the value generated by the production of data that each user of the network gives away for free, using devices (“means of production”) that they have purchased for themselves (personal computers, laptops, tablets, mobile devices, etc.). Like wages are the remuneration of certified labour activity, basic income can be seen also as the remuneration of a not-certified and not-recognised productive activity, as primary income (Fumagalli & Vercellone, 2020).

Despite the many basic income trials and projects around the world, there are no direct and specific basic income experiments targeting platform workers. So, how could it affect them? What effects could basic income produce on platform workers and on precarious workers in general?

The challenge for governments and policymakers is to provide a specific scheme for people who by definition do not have a stable situation or status, and who also do not have the possibility to pay regular and high social contributions.

The extent to which precarious workers worry about job loss can be captured “as a function of the probability of losing one’s current job (job insecurity), one’s ability to find another job (labour market insecurity) and the availability of income support during an extended unemployment spell (income insecurity)” (Birnbaum & De Wispelaere, 2020). If the point is not to increase employment at any cost but rather improve people’s chances of finding well-paying jobs, an unconditional basic income can hand a crucial advantage to people by strengthening their bargaining power so as to allow them to choose desired and promising jobs and refuse the low-paying ones that afford them no rights. It is on the basis of such a broad concept of social justice that basic income can revalue work (Van Parijs, 2017).

Basic income could therefore provide non-standard, precarious and platform workers with income security that can allow them to choose a less stressful job or a part-time job without feeling forced to work many hours a week in order to get enough wage to live on. They could even choose not to work for any platform at all and engage themselves in other activities without running the risk of becoming poor.

An exit option amounts to an improved bargaining position by imbuing workers with the “power to say No”. Both the unemployed and the working poor are expected to benefit from the introduction of an unconditional floor of income support (Van Parijs & Vanderborght, 2017). This reduces an important amount of uncertainty among vulnerable and marginalised workers who are often employed in jobs with little or no access to social protection (Kalleberg, 2018).

Quoting again The Social protection of workers in the platform economy (Forde et al., 2017): “there is considerable overlap between workers in the platform economy and those engaged in other forms of non-standard and insecure work, which often carries similar risks of non-coverage of social protections. Consequently, we are skeptical of any approach that would seek to treat platform workers as a ‘special case’, by introducing social protection arrangements that applied only to this category of worker. Instead, we would recommend a more inclusive approach, […] designed to encompass the wider, growing population of non-standard workers. If the growth of platform work has taught us anything, it has shown that we can expect further innovation in employment forms, and therefore an approach that seeks to address wider issues in the coverage of social protections for non-standard workers carries the benefit of being ‘future-proofed’, at least so far as can be reasonably foreseen”. This reflection encourages us to develop the necessary steps for a “reform of social security systems to accommodate platform workers along with other groups of workers who now find themselves increasingly at risk of not being covered by social protections”.

3.3 An Unconditional Guaranteed Minimum Income

Another possible scenario could be to provide for an unconditional guaranteed minimum income that is not paid to all adult residents but only to those whose income is below the relative poverty threshold. Since they are not all poor at the same level, the benefit could, therefore, provide for an income supplement such as to bring the level of each to the relative poverty line. Decision-makers should promote moves towards universal benefits as part of social protection systems, which remove the need for complex rules and enforcement concerning eligibility. This may already be achieved by extending the current guaranteed minimum income schemes, that is, by making it easier to access these systems and removing any obligation and conditionality on active labour policies.

The proposal for an unconditional guaranteed minimum income should allow people to reject material blackmail, to say “no” to underpaid or unacceptable job offers, thus allowing a greater degree of freedom of choice. It can be provided to all those who are below a certain threshold and converge towards the median level of income distribution. This would allow that as the minimum threshold increases (following the initial introduction of the measure) the number of beneficiaries can constantly increase until it reaches gradual levels of universality (Fumagalli et al., 2021).

The thesis therefore argues that, in an initial phase, the unconditional aspect of the measure should be particularly supported. This would also allow a lower initial cost, limiting the number of beneficiaries and then extending the measure over time up to its universality (Fumagalli, 2018).

Apart from some experiences, such as the one in Alaska,9 where there is a dividend paid to all residents, it must be said that a large part of basic income experiments and pilot projects around the world have focused on better understanding how an unconditional, rather than a universal, income can affect beneficiaries.

Taxation Policies on Platform Capitalism: Open Questions

The adaptation of an efficient welfare system to changing working conditions and the emergence of precarious, intermittent forms of work, not always embedded in subordination contracts (typical of platform workers), requires the adoption of new fiscal and funding policies.

The new processes of valorisation, which are based on daily life and no longer only on a work activity certified as such, pose the question of social distribution of income, which goes beyond the labour condition alone.

It is the metropolitan realities, territories and communities that represent the basis of the accumulation process capable of creating wealth that, however, does not return to these very territories.

Among the various possibilities, fiscal intervention is certainly one of the most important in filling this gap.

4.1 The OECD Approach

The first of the supranational organisations that analysed the insidiousness of intangible assets and the uncontrolled development of the digital economy was the OECD, which in 2013, with its report Addressing Base Erosion and Profit Shifting (BEPS), became aware of the ineffectiveness of its member countries’ tax responses, even in the form of best practices. The critical factor lies in the changes inherent in global business practices, which are moving faster than current regulatory standards on taxation.

To facilitate the identification and classification of digital businesses, the OECD has listed a number of features that are increasingly prominent in the digital economy in the Addressing the Tax Challenges of the Digital Economy Report (OECD, 2015).

Characteristics present in most of those companies that we can consider part of the digital economy:

  1. The dematerialisation of activities and the consequent mobility of them, their customers and the organisation implementing them.
  2. The planning of strategies based on the exploitation of network effects (question of defining the value of turnover and its profitability).

In general terms, in the area of direct taxation, the main challenges raised by the digital economy fall into three broad categories: nexus, which is based on a significant economic presence in the country concerned; data, which are relevant for determining the jurisdiction in which value creation occurs; characterisation of payments for new digital products.

The digital economy also creates challenges for value added tax (VAT) collection, particularly where goods, services and intangibles are acquired by private consumers from suppliers abroad. This is partly due to the absence of an effective international framework to ensure VAT collection in the jurisdiction of consumption. For economic actors, and in particular small and medium enterprises (SMEs), the absence of an international standard for charging, collecting and remitting the tax to a potentially large number of tax authorities, creates difficulties and high compliance costs.

While in the field of indirect taxation there are still many difficulties, since a single tax framework from Europe would be needed, in the field of direct taxation, the OECD has formulated specific proposals10:

  1. the development of a new nexus between a business and a country based on the concept of “significant economic presence”, through which appropriate methodologies for determining income in line with those existing in a country can be defined;
  2. the imposition of a withholding tax on the so-called “digital transactions”;
  3. the introduction of an “equalisation levy” on digital transactions to serve as a way to tax a non-resident enterprise’s significant economic presence in a country in order to ensure equal treatment of foreign and domestic businesses.

The nexus in the form of significant economic presence is based on a taxable presence in a country when a non-resident enterprise has a significant economic presence11 in a country on the basis of factors that evidence a purposeful and sustained interaction with the economy of that country via technology and other automated tools. These factors would be combined with a factor based on the revenue derived from remote transactions into the country, in order to ensure that only cases of significant economic presence are covered, to limit compliance costs of the taxpayers and to provide certainty for cross-border activities.

In this regard, the OECD highlighted that the collection of the revenues earned from customers in a country (revenue-based factor) could be considered a basic factor for establishing nexus in the form of a significant economic presence in the country concerned, and underlined the need to take into account all remote digital transactions concluded by the non-resident enterprise with in-country customers.

The OECD has proposed different methods for determining the income attributable to the significant economic presence:

  1. Based on fractional apportionment: according to which profits earned in the digital economy and generated in a specific country are determined by applying either a %age based on a predetermined formula or on the basis of variable allocation factors determined on a case-by-case basis to the overall revenues of the non-resident enterprise12;
  2. Modified deemed profit method: according to which large international multi-business groups could compute income from online transactions on a presumptive basis, based on the amount of profits generated in other sectors by the same foreign company with a significant economic presence in another country.13

4.2 The European Approach

The European Commission considers the current tax framework not aligned with the evolution of the economic context, for the regulations in force are tailored to a traditional concept of the economy rather than to activities that are increasingly based on intangibles and data. Having perceived the reduced tax burden on digital businesses compared to traditional enterprises, the Commission has always highlighted how the implementation of unilateral and uncoordinated measures by individual Member States risks creating new obstacles and the possibility of tax avoidance in the European Single Market.

This brings to the surface one of the original sins behind the construction of the European Community: the lack of a common tax policy or a process of harmonisation between different national tax policies. With the aim of defining an appropriate taxation system that does not jeopardise the principles of tax fairness and the sustainability of the EU’s economic and social model, at the informal meeting of EU Ministers for Economic and Financial Affairs (Ecofin) held in Tallinn (EST) in September 2017, Germany, France, Italy and Spain signed a joint proposal,14 in the form of a political declaration, regarding the need for launching a legislative initiative for the taxation of the web economy aiming to define an adequate tax system that did not jeopardise the principles of fiscal fairness and sustainability of the EU economic and social model. The four countries proposed to introduce the so-called “equalisation tax” on turnover generated in Europe by digital companies, in line with the proposals for the introduction of the Common Consolidated Corporate Tax Base (CCCTB)15 and the Common Corporate Tax Base (CCTB).16

In short, the CCCTB proposal consists of:

  1.  an equalisation tax on turnover of digitalised companies: a tax on all untaxed or insufficiently taxed income generated from internet-based business activities;
  2. a withholding tax on digital transactions: a gross-basis withholding tax on certain payments made to non-resident providers of goods and services ordered online;
  3. a levy on revenues generated from the provision of digital services or advertising activities: a separate levy could be applied to all transactions concluded remotely with in-country customers where a non-resident entity has a significant economic presence.

However, in order to be even more effective, this proposal should have had an ultra-European dimension. The point is that at the G20 meeting held in March 2018 in Buenos Aires, the proposal did not reach consensus. As a result, this issue continued to be dealt with exclusively at a European level, despite the internal tensions within the Old Continent, given the tax advantages offered by some Member States, such as Ireland, the Netherlands and Luxembourg, which, as a matter of fact, implemented fiscal dumping policies.

The European approach, aimed at valuing mainly the place where users are located and not only the structures of the enterprise dedicated to the production of digital services, is quite innovative. This gives rise to entirely new issues, with major implications related to where users are located when accessing the digital interface, the territorial distribution of profit according to the number of users and how they access the digital interface.

Unlike at the Buenos Aires G20 meeting in 2018, where no agreement was reached on the digital tax, minimum corporate and platform taxation became one of the two work streams agreed by members (OECD) and the G20 Inclusive Framework, a working group of 141 countries that worked on a global consensus-based solution to reform the international corporate tax framework. This working group led to a global agreement among 137 jurisdictions in October 2021. The discussions focused on two major themes: Pillar 1, the partial reallocation of taxing rights and Pillar 2, the minimum level of taxation of profits of multinational enterprises.

On 22 December 2021, the European Commission proposed a directive to ensure a minimum effective tax rate for the global activities of large multinational groups. The proposal delivers on the EU’s commitment to move very quickly and be among the first to implement the recent landmark global tax reform agreement, which aims to bring fairness, transparency and stability to the international corporate tax framework.

The proposal closely follows the international agreement, which was signed at the G20 meeting in Rome on 30–31 October 2021, and sets out how the principles of the 15% effective rate—agreed by 137 countries—will be applied in practice within the EU. It includes a set of common rules on how to calculate this effective rate, so that it is applied correctly and consistently across the EU.

As promised, the European Commission is now implementing Pillar 2 of the Global Agreement, making global minimum effective corporate taxation a reality for large group companies located in the EU.

The proposed rules will apply to any large group, both domestic and international, including the financial sector, with combined financial revenues in excess of 750 million euros per year, and with a parent company or subsidiary located in an EU Member State.

In line with the OECD/G20 Inclusive Framework Agreement, governmental entities, international or non-profit organisations, pension funds or investment funds that are parent entities of a multinational group will not fall under the scope of the OECD Pillar 2 Directive. This is because such entities are usually exempted from domestic corporate income tax in order to preserve a specific policy outcome. This may be because the entity is performing governmental/quasi-governmental functions, or to ensure that funds or pensions do not risk double taxation.

The effective tax rate is determined for each jurisdiction by dividing the taxes paid by entities in the jurisdiction by their income. If the effective tax rate for entities in a particular jurisdiction is lower than the 15% minimum, then Pillar 2 rules are triggered and the group must pay an additional tax to bring its rate up to 15%. This additional tax is known as the “Income Inclusion Rule”. This surcharge applies regardless of whether the subsidiary is located in a country that has joined the OECD/G20 international agreement or not.

4.3 Tax Avoidance by Corporate Platforms

According to the 2021 report Top 200, The growth of the power of multinationals drawn up by the Centro Nuovo Modello di Sviluppo (CNMS),17 there are 320,000 multinational companies employing 130 million people, or 4% of the world’s workforce. Their turnover is 132 trillion dollars, with net profits of 7.2 trillion dollars. The top 200 multinational companies account for 14% of this turnover.

According to the report, there are about 41,000 companies listed on the stock exchange, with a total capital of 84 trillion dollars, equivalent to the GDP of the entire planet. Approximately 40% of the profits of multinationals go through tax avoidance: according to the OECD itself, this amounts to almost 800 billion dollars, causing a tax loss of 240 billion dollars to States.

While, on the one hand, the objective of a minimum tax on the profits of multinationals and platforms may be shareable in principle, at least at the G7 level, on the other hand, its implementation does not correspond to an increase in the overall taxation of multinationals.

However, it should be noted that the 15% rate is only slightly higher than the rate currently paid by multinationals in low-tax countries such as Ireland (12.5%), but obviously much lower than the rate paid by multinationals in all other countries (with an average tax rate of 26%). This translates into a sort of generalised tax discount and makes it all the more urgent and necessary to launch a roadmap at the European level for the construction of a common fiscal policy.

While the debate rages on, while mediations and possible solutions are sought, while discussions continue in the OECD to find an international agreement on a single web tax for large technology groups, Amazon, with a market capitalisation of over USD 1.5 trillion, has paid only USD 169 million in taxes in the USA in 2019. In Europe, the situation does not seem to be any better. In the UK, Amazon paid USD 8 million (6,3 million pounds) in taxes on a turnover of more than USD 17.5 billion (Bergin, 2020). In France, in 2018, it paid 250 million euros in taxes (total of all employee charges), while turnover increased to 4.5 billion18 euros. In Spain, Amazon paid around 4.4 million euros in taxes in 2018 against total declared revenues of 490 million euros (Fernandez, 2019). In Italy, Amazon’s companies paid only 11 million euros to the Italian tax authorities, against a turnover of USD 4.5 billion (Pitozzi, 2020) and in 2019, Google, Amazon, Facebook, Apple, Airbnb, Uber and Booking paid a total of 42 million euros to the Italian tax agency (Livini, 2020). But even more impressive is that the TV streaming platform Netflix paid only 6,000 euros to the Italian Revenue Agency.19

Just to give an idea of the turnover we are talking about, and therefore of the need to find innovative forms of taxation to regulate this market, here are a few figures20 which analyse the balance sheets of the 25 web giants over the five-year period 2015–2019 and the impact of COVID-19 on the results for the first half of 2020.

Among the analysed companies, 13 operate mainly in internet retailing (e-commerce, entertainment services, online travel and sharing mobility), 7 in software production and 5 in internet services (social media, search engine, web portal); 14 of them are based in the USA, 6 in China, 3 in Japan and 2 in Europe (Germany). The market is increasingly concentrated: the top three players, Amazon, Alphabet and Microsoft account for about half of aggregate revenues. In 2019, the aggregate turnover of the 25 web giants reached 1,014 billion euros, or 8% of total turnover of global industrial multinationals, experiencing revenue growth over ten times higher than large manufacturing (+118.3% in the five-year period 2015–19 compared to +10% for multinational manufacturing companies). Profits also grew to 146 billion euros (15.6% of the world’s industrial multinationals), increasing at an average annual rate of +24.1% (large manufacturing is stuck at +0.6%) and totaling 480 billion euros in cumulative profits in 2015–2019. The crisis caused by COVID-19 saw an increase in revenues from e-commerce (+31.3% in the first six months of 2020 compared to the same period in 2019), fintech (+26.1%), subscriptions (+24.6%) and cloud service offerings (+22.2%).


As we have seen, enormous transformations are sweeping through the world of work, the forms of production, the organisation of work itself, the capacity to generate profit and the rules and regulations to meet these enormous transformations. Constructing a new welfare and claiming new rights, in the platform economy, is not only a question of social justice, but also of how to imagine a new taxation capable of supporting a new welfare model. Where to tax and what to tax are the first two fundamental points of the debate, and they are by no means simple to answer. As we have said, the global nature of digital platforms, their ability to act, in essence, as intermediaries between supply and demand, as well as the collection, management and sale of huge amounts of data or the taxation of digital transactions alone do not make it easy to identify a technical solution. Just as finding innovative forms of social protection poses questions of equal complexity. Should new forms of social protection affect only platform workers? Should a right to basic income for all be introduced encompassing also consumers of technology and thus producers of data? What role does the State play in this regard? Should local measures be implemented only where platforms operate (cities for instance) or continental interventions should be needed? Surely what is needed is to move towards a distribution of the wealth produced and thus identify increasingly broad and universal measures of social protection. This could be done by launching basic income experiments, implementing effective interventions at the local level, identifying good innovative practices or strengthening existing measures and rights. Basically, it is a matter of imposing new fiscal policies, and thus putting policy choices back at the centre of the decision-making process.