Since the end of 2018, several governments around the world have put forward proposals for the introduction of a digital service tax in their respective countries. As digital services change the nature of business, governments see the tax as a way to overcome the challenges that these digital businesses create for the international corporate tax system.
EU Council at a standstill over Digital Taxation and e-Privacy
On 4 December 2018, ministers of EU member states gathered in the respective groups of the European Council, to discuss two proposals on a Digital Service Tax and on the e-Privacy regulation. On both issues, EU countries are still clearly divided, and are failing to make significant progress.
The EC’s Digital Tax faces a long road ahead
The European Commission has today launched a new proposal to adapt the taxation system of the digital economy, in which value is created in countries where a business does not have a physical presence. The EC proposes to introduce a taxable “digital presence”, fulfilling one of three criteria (at least €7m turnover per year in an EU country; more than 100,000 users in a member state in a year; or more than 3,000 business contracts in a state in a year). It also proposes an “interim tax”, which will apply to revenues created from online advertising.
