18 Jun 2018

DIGITALEUROPE's comments on EU Directive proposals regarding ‘Fair Taxation of the Digital Economy’

Introduction

DIGITALEUROPE and its members are grateful for the opportunity to comment on the EU directive proposals on digital services tax and significant digital presence, released on 21 March 2018.

DIGITALEUROPE represents the digital technology industry in Europe. Our members include 60 world-leading corporations in IT, telecoms and consumer electronics companies, on one hand, and 38 national trade associations whose membership gives us access to more than 36,000 businesses across Europe, mostly SMEs and start-ups.

DIGITALEUROPE wants a European Union that nurtures and supports digital technology industries, and that prospers from the jobs we provide, the innovation and economic benefits we deliver and the societal challenges we address.

Key message

  • The digital economy should not and cannot be ring-fenced. Separate sets of rules will not promote the goals such as fairer, more effective and efficient taxation, tax certainty and better functioning of the (Digital) Single Market or even prevent tax avoidance.
  • The EU aims for an international solution to update the taxation rules to be fit for the 21st century, as confirmed on 11 June by the G7 communiqué: “We are committed to work together to seek a consensus– based solution by 2020. We will exchange approaches and support international efforts to deliver fair, progressive, effective and efficient tax systems. We welcome the OECD interim report analysing theimpact of digitalization of the economy on the international tax system.” Likewise, DIGITALEUROPE fully supports OECD-led efforts to review the appropriateness of the current international tax framework, and whether value creation from data should be recognized in allocation of taxing rights and receipts, and to achieve global consensus and alignment of rules.
  • To safeguard the principles of fairness and integrity in tax policy, any tax on the activities of corporations should be linked to profit, not revenues, and should not result in double taxation and not undermine the existing tax treaties.

Table of content of the full document

  • 1.

    Digital Service Tax

    1. Principal argument
    2. Impact on SMEs
    3. The DST might cause significant double taxation
  • 2.

    Digital permanent establishment

    1. List of digital services covered
    2. Threshold of significant presence
  • 3.

    Taxation where the value is created

  • 4.

    Summary

  • 5.

    Additional remarks

    1. Digitisation and automation of taxation
    2. GDPR
Download the full document
FULL POSITION PAPER
For more information please contact
Patrice Chazerand
Director for Digital Trade and Taxation
Back to Digital Trade
View the complete Policy Paper
PDF
Our resources on Digital Trade
Press Release 25 Jan 2019
DIGITALEUROPE welcomes WTO decision to devise global rules on electronic commerce
resource 23 Jan 2019
Japan data adequacy and economic partnership agreement will strengthen EU digital economy
Press Release 11 Dec 2018
DIGITALEUROPE calls on European Parliament to endorse EU-Japan Economic Partnership Agreement
Hit enter to search or ESC to close