On Tuesday 10 October, France and Spain got behind the European Commission's proposal to take the first step towards a definitive cross-border VAT regime.
“This is an important leap forward in terms of having a harmonised tax system” and an important step towards improving the functioning of the internal market, the Spanish minister, Luis De Guindos, told the meeting of the finance ministers.
He went on to say that a system based on a one-stop shop was the right approach. He pointed out that the new system would require greater administrative cooperation between member states and stressed that simplified procedures for businesses should not hamper the fight against fraud. The French minister, Bruno Le Maire, said that he fully supported the principle of the Commission's proposal.
During another discussion at Ecofin, the Commission presented its communication on the taxation of digital products. This document lists the possible options in order, in the short term, to ensure that the Internet giants pay tax where they create value. The French turnover tax or a tax on advertising revenue are among the options under consideration (see EUROPE 11866).
According to our information, only Le Maire spoke after the Commission's presentation. He is reported to have said that the member states' experts would have to look at the options and select the best one. At a press conference, the Estonian finance minister, Toomas Tõniste, reiterated that the ministers' informal meeting in Tallinn had shown that taxing the Internet giants was an important matter on which progress must be made towards a solution acceptable to all.
Eight countries are particularly reluctant to see a turnover tax on these digital companies, as suggested by Le Maire. “I think that the European Parliament's idea that the low-taxation countries, such as Ireland, could end up with a bigger share of this forthcoming tax needs to be examined. It is true that certain countries could lose out and we will have to see how we can respond to their concerns”, Le Maire told a small group of journalists. (Original version in French by Élodie Lamer)