On Monday 25 June, the organisation representing the e-commerce sector, Ecommerce Europe, wrote to the European leaders advising them to end the discussions on a European tax on the gross revenue of the activities of digital platforms ('digital services tax' or DST), instead prioritising the discussions on the subject at international level (see EUROPE 11986).
The organisation, which considers that the OECD is the appropriate forum for discussions, argues that a tax on revenue rather than profit would have significant negative economic effects that have not been properly considered.
It also has concerns that although designed to be temporary, the measure will actually become permanent, particularly because the European Commission's proposal does not contain an end date. At the very least, therefore, Ecommerce Europe recommends the inclusion of specific time clause providing for the measure to be phased out.
The organisation is also particularly concerned by the negative effect that the tax may have on European merchants, as it considers that the cost will inevitably be passed down the supply chain. “While the declared target of the tax is large 'digital' companies, it will be small businesses and consumers that are ultimately penalised”, it warns.
According to a draft text of the conclusions of the European Council, dated 25 June, the heads of state or government are expected to commit to move the work forward on this proposal (see EUROPE 12042). (Original version in French by Marion Fontana)