OVERVIEW OF DIGITAL TAX (DT) IMPLEMENTATION IN THE EU
OVERVIEW OF DIGITAL TAX (DT) IMPLEMENTATION IN THE EU Supportive Opposed Neutral
Despite negotiations between Member States on an EU Digital tax levy breaking down at the March 2019 Economic and Financial Affairs Council (ECOFIN), the issue is certain to resurface when the new Commission mandate starts in October. Digital taxation is already a “hot” topic for Commission and MEP candidates in the EU elections debates so far. Candidates for the Commission Presidency from the three biggest political groups have all expressed support for higher taxation of tech giants. The favourite amongst the Spitzenkandidaten, the EPP’s Manfred Weber, pledged this month to adopt a fair digital tax to support the formation of a Digital Transition Fund, to mitigate “digital disruptions” in the labour market. Impatient with the lack of progress at EU level, several Member States including France, Italy, Spain, and the UK have either proposed or adopted national digital taxation measures. This fragmented approach will add pressure on the Commission to propose an alternative EU solution during its next mandate but it also opens the door for Member States to push on with an Enhanced Cooperation method, reminiscent of the drive to adopt the financial transaction tax (FTT). Here, we outline the state-of-play across the Union and the national measures announced so far. Meanwhile, the EU is also seeking an international level solution led by the Organisation for Economic Cooperation and Development (OECD). The OECD’s Digital Economy Task Force will prepare an interim report by June 2019 with a view to proposing recommendations by 2020.
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