At the Economic and Financial Affairs Council (ECOFIN) held on 6 November, ministers of the EU28 have debated the detail of the proposed tax on Digital Services.
Background: The EC introduced a proposal for taxation on digital services in March this year. Almost immediately, the proposal was met with mixed feelings by EU member states, and by the OECD which has worked on the issue and highlighted risks of economic distortion and higher costs for business.
What’s new? The EC is willing to press ahead and finalise the agreement by the end of the year, ahead of next year’s European elections; in the meantime, countries such as the UK have put plans in place to legislate on the matter, unless an international framework is agreed by 2020.
How deep are the divisions? Reportedly, deep enough to cast doubts on a prompt agreement. The Council aims to reach a deal at the next meeting (4 December), but also admits states are very far apart on several aspects. It is understood that Ireland, Denmark, and Sweden are entirely opposed to the tax; and that Cyprus, Czech Republic, Finland, Germany, Latvia, Lithuania, Luxembourg, Malta, Netherlands expressed major concerns.
