A few days ago, the European Commission published its inception impact assessment on the new European digital tax, expected in the second quarter of 2021, and the European Parliament has also begun its work.
The co-rapporteurs Andreas Schwab (EPP, Germany) and Martin Hlaváček (Renew Europe, the Czech Republic) have just finalised their draft own-initiative report on digital taxation.
This is the second time that Parliament will vote on this issue, since the European Commission had already made a first attempt at a tax on digital services in 2018, which MEPs had supported (see EUROPE 12151/1), but on which the Member States had failed to agree (see EUROPE 12212/6).
The draft text, which has not yet been discussed in the Parliamentary committee, stresses that the Covid-19 pandemic has greatly benefited digital businesses and accelerated the transition to a digital economy. Such a situation makes it more urgent than ever to reform the current tax system to ensure a fair contribution from the digital economy.
The co-rapporteurs insist that, irrespective of the progress of the OECD negotiations (see other news), the EU should be ready to deploy its own solutions to tax the digital economy by the end of 2021. They therefore invite the Commission to present proposals by June 2021, as a priority, for the introduction of a European tax on digital services, while anticipating their compatibility with the reform negotiated at the OECD.
They consider that the scope should be broad and cover not only highly digital business models, but also, more broadly, large companies in contact with consumers, while not harming traditional businesses, including SMEs.
Both MEPs note that some Member States consider taxation of the digital economy as an urgent issue and have therefore introduced taxes on digital services at national level. Nevertheless, they recall that these national measures should be phased out as soon as a multilateral solution is found.
Furthermore, they call on the OECD to finalise its negotiations as soon as possible. And they recognise that the two pillars of the reform (digital taxation and minimum corporate taxation) are complementary and support their simultaneous adoption.
Finally, the text asks the European Commission and the Council of the EU to intensify their dialogue with the new US administration on digital tax policy. It also calls on the EU Council to oppose the American proposed ‘safe harbour’ clause, which would amount to setting up a voluntary scheme.
See the report: https://bit.ly/3qZjRjH (Original version in French by Marion Fontana)