At a hearing of the TAX 3 committee of the European Parliament on Tuesday 11 September, representatives of the European Commission and the OECD outlined their arguments in favour of an interim solution at EU level and a long-term international solution to the problem of the taxation of the digital sector, respectively.
Eduard Folch-Sogas, from the Commission's Taxation and Customs Directorate General, opened the debate by determinedly providing reassurances as to the temporary nature of the proposal for a 3% tax on the gross earnings of the activities of digital platforms (digital services tax, or DST) and its characteristics.
“DST is not a tax on companies (…), it is not a tax on a specific sector, it is not even a tax on digital companies (…). DST is a tax which has to be paid by taxable persons which are providing certain digital services”, he explained.
Eric Robert of the OECD took stock of negotiations within his organisation, expressing considerable positivity. “We can be rather optimistic for the OECD to make significant progress in between now and the deadline, which is 2020”, he said (see EUROPE 11983). What makes this particularly likely is that one of the countries that has so far been blocking any progress – the United States – is now clearly open to discussions, he added.
This air of optimism aroused the curiosity of the MEPs, who questioned him on the subject several times, but also about the OECD's vision of the unilateral measure proposed by the Commission.
There is no consensus at the OECD on either the merit or the need for immediate and unilateral actions, he explained, adding that this is in the DNA of an organisation that aims, by its very nature, to seek multilateral solutions.
He added that in a measure such as the DST, it is important to have a 'sunset clause', echoing the recent proposal tabled by France (see EUROPE 12092).
“Rather than trying to torpedo the Commission's proposal, you would do better to build on it”, said French MEP Pervenche Berès (S&D), forcing the OECD representative to clarify his comments and acknowledge that the EU had a decisive part to play in the positive dynamic within the OECD today. (Original version in French by Marion Fontana)