The proposals published by the European Commission regarding the introduction of an interim and a long-term solution for taxing the digital economy are causing divisions between European countries. The initial support of the EU’s five biggest economies is being reconsidered as a consequence of the tensions with the United States. Furthermore, smaller EU Member States are worried that the proposed thresholds for the long-term solution to tax businesses where they have significant interaction with users through digital channels could cause a shortening in the share of revenue from tax.
Furthermore, during a conference hosted by the S&D group and the Foundation for European and Progressive Studies (FEPS), several academics have expressed their concerns on the interim tax (Andrés Bàez of the University Carlos III stated that there is no need for an urgent patchwork) and of the potential effect of such tax on small businesses (Peter Hongler of the University of Zurich suggested that Google would shift the burden of the tax on the prices for advertising slots). During the same event, the head of tax policy at IMF stressed that the digital economy needs no specific tax regime, since there are various degrees of digitalisation and John Vella from the University of Oxford underlined that the digitalisation of the economy would not create a new problem but simply exacerbates existing ones. Valeska Gronert, from DG TAXUD replied to these criticisms opposing that the alternative would have been to wait for the full range of initiatives taken individually by the Member States. Furthermore, during a conference in Paris, Stephen Quest (Director General from DG TAXUD) highlighted that the proposals are strongly supported by the biggest EU Member States (i.e. France, Germany, Italy) and that the EU is playing a leading role at OECD and G20 level with regard to the taxation of the digital economy.
The French La Poste was granted a tax relief from 2018-2022 by the Commission so it can maintain its high-density coverage of postal services in France. According to the Commission this allowance will not distort competition in the postal sector and is in line with EU state aid rules. Over the next four years La Poste will receive a tax reduction worth €900 million. Read on
The Commission also approved a Portuguese tonnage tax and a scheme to support seafarers hoping that it would encourage ship registration in Europe, preserve employment in the maritime sector and push for high environmental standards. For the next 10 years maritime transport companies will pay a tonnage tax based on their net tonnage. To qualify for this scheme, shipping companies must be registered with European Economic Area (EEA). Read on
Regions hit by several earthquakes in the past two years in central Italy will receive a public aid of €44 million in order to restore the infrastructure and rebuild the economy. The Commission approved this measure to be “well-targeted” and in line with EU state aid rules. The scheme will run from 2018-2020. Read on
The Commission is organizing five seminars on fair taxation in five different cities throughout Europe. The aim is to encourage the exchange of knowledge to tackle tax abuse and tax avoidance. The target group will be civil society organizations, academics, business representatives and national policy-makers in Riga, Vienna, Paris, Rome and Dublin. Register here
