In March 2018, the European Commission published a proposal for a directive on the taxation of companies with a “significant digital presence” in the European digital single market. The aim of the directive is a stronger inclusion in tax schemes of companies whose value creation does not take place in Europe.
The European Commission intends to introduce a taxation basis for a “significant digital presence” (Art. 4). With this, it is intended to tax companies whose revenues, profit, or number of users in individual EU Members States exceed a certain threshold, and who do not pay tax in the respective Member States.
The Association of the Internet Industry has now published a statement on the EU Commission’s proposal for a directive related to the taxation of a “significant digital presence”. In its position statement, eco points out that the Commission proposal for the introduction of a digital taxation has many shortcomings and ambiguities which, taken together, could lead to discrimination against services provided digitally and business models financed by advertising. The further pursuit of this European initiative should therefore be critically reviewed. Especially in view of the fact that the OECD is also working on a solution for the treatment of digital business models in the context of corporate taxation, the Association of the Internet Industry cautions that unilateral European initiatives should be deferred until these concerns have been addressed.
Fair taxation of companies should not be based on the media or distribution channels. It should be based on general principles and be clearly organized. The association contends that any attempt at double taxation should be avoided at all costs.