MEPs expressed their indignation on Wednesday 12 December at the deadlock in the Council's negotiations on the proposal to tax gross income from the activities of digital platforms ('digital services tax' or DST) at 3%; meanwhile, the European Parliament prepares to vote on Thursday on the two ambitious opinion reports by Dariusz Rosati (EPP, Poland) and Paul Tang (S&D, the Netherands).
The Austrian Presidency of the EU Council reminded MEPs that Vienna had put a "balanced" compromise text on the table, but that it is ultimately a very watered-down Franco-German proposal that would only apply to online advertising as discussed at the Ecofin Council on 4 December (see EUROPE 12152), and that it is on this basis that discussions will now continue.
"I waver today between consternation and fury”, said Alain Lamassoure (EPP, France). "The invention of a temporary, indirect tax at a derisory rate (...) we were told that this solution would have the advantage of being simpler and faster to adopt. One year later and the project is stuck”, he continued
"I am very disappointed with the current result”, said Evelyn Regner (S&D, Austria), who believes that the Franco-German proposal is even a setback for European taxpayers.
For Bernd Lucke (ECR, Germany), the proposal was bad from the outset and a tax only on digital giants is not the right tool.
The Spanish EPP member, Gabriel Mato, focused less on work in the Council and more on work in the Parliament. He criticised the S&D group's attitude in reopening the compromise reached on maintaining the 3% tax rate during the parliamentary committee vote (see EUROPE 12151).
In the review clause of the adopted report, it states that the Commission would reassess a possible increase to 5%, with a corresponding tax allowance.
But the S&D, Greens/EFA and a handful of GUE/NGL members tabled amendments in the plenary session to raise the rate to 5%. It should be noted that the other members of the GUE/NGL group are suggesting that each Member State should be able to define its own DST rate.
Unanimity is not inevitable
Tired of the untimely blockages on tax issues that require unanimity in the Council and upon which they are only consulted, MEPs have once again reiterated their call for a transition to qualified majority voting.
"It is not inevitable to allow a few Member States to take the general interest hostage (...) If we are politically courageous, it will be possible to bypass unanimity, without changing the Treaties. When there is a distortion of competition, Article 116 allows a move to majority voting", said the French MEP, Eva Joly (Greens/EFA). It also believed that the tax gap between digital and traditional companies would justify a switch to qualified majority voting.
Commissioner Günther Oettinger confirmed that the Commission would present a proposal for the transition to qualified majority voting for certain tax matters (see EUROPE 12098) in early 2019. (Original version in French by Marion Fontana)