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Source: European Parliament 2

Taxation of the digital economy: Latest developments

15-12-2020

There is an important ongoing debate on the direct and indirect taxation of the digital economy. Proposals on digital taxes, which are under negotiation in the OECD, are inter-linked with European Commission proposals on the same subject. As the Council did not reach an agreement on the Commission proposal for a digital services tax, national initiatives appeared in the interim until a global solution in the area of direct taxation could be found in the OECD. On 1 December 2020, the Council endorsed the text of amendments to the Directive on Administrative Cooperation between the Member States (known as DAC7), which will oblige digital platform operators to provide information on the operations they intermediate. If an agreement is not achieved at global level by July 2021, it could trigger an EU response in the form of a digital levy. There is also a debate on whether that levy should be similar to the Commission proposal that failed to get political backing or not.

There is an important ongoing debate on the direct and indirect taxation of the digital economy. Proposals on digital taxes, which are under negotiation in the OECD, are inter-linked with European Commission proposals on the same subject. As the Council did not reach an agreement on the Commission proposal for a digital services tax, national initiatives appeared in the interim until a global solution in the area of direct taxation could be found in the OECD. On 1 December 2020, the Council endorsed the text of amendments to the Directive on Administrative Cooperation between the Member States (known as DAC7), which will oblige digital platform operators to provide information on the operations they intermediate. If an agreement is not achieved at global level by July 2021, it could trigger an EU response in the form of a digital levy. There is also a debate on whether that levy should be similar to the Commission proposal that failed to get political backing or not.

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