Technical work on the Commission's proposal for a 3% tax on the gross revenue of the activities of digital platforms ('digital services tax' or DST) is underway at the Council, with a first compromise proposal of the Bulgarian Presidency examined by a working group on 13 June.
A working document drafted in early June and of which EUROPE has had sight makes some changes to the text and contains a series of questions compiled by the Presidency.
The first major area concerns thresholds. The initial proposal puts companies in the scope of application of the European legislation if the revenue generated by their digital services exceeds €50 million and annual turnover is at least €750 million (see EUROPE 11986).
The Presidency is considering removing the latter threshold on turnover and is taking the member states' temperatures over the possibility of revising the amounts.
Another change suggested concerns the country of identification. Whereas the Commission provides for companies that are liable for the future tax in two different member states to be able to choose a country of identification (where the tax will be paid), the Presidency proposes removing this possibility, so that the country of identification is the one in which the higher amount is payable.
Similarly, it proposes that once the member state of identification is identified, it will remain unchanged for two consecutive taxation periods unless, in the course of a period, the taxpayer ceases to be liable for the tax in that country.
In this version, the Presidency also removes a provision allowing member states to adopt measures to prevent tax evasion and abuse concerning this tax. In a comment, it describes this provision as superfluous.
While the Bulgarian Presidency has made this dossier a priority (see EUROPE 12042), there is nothing less certain as regards the Austrian Presidency.
In conclusions of 28 and 29 June, the European Council is expected to reiterate that ensuring fair and effective taxation remains a priority for the EU, according to a draft text dated 19 June published by POLITICO. The heads of state or government are also expected to undertake to move forward work on this proposal. For Germany and France, this is already a done deal. At the Meseberg bilateral summit on Tuesday (see other article), the two countries reiterated their hopes of reaching agreement on this text by the end of the year (see EUROPE 12011). (Original version in French by Marion Fontana)