A closer look at the EC’s proposed digital services tax

The European Commission’s proposal for an interim turnover tax on certain digital services provided to users located in member states was put forward on 21 March for consideration by the Council of Economic and Financial Affairs and for unanimous approval by all member states. Its stated aim is to provide a coordinated and sustainable solution to the legal uncertainty and disruption to the single market resulting from some member states unilaterally implementing their own domestic measures in this area. While some member states have welcomed these plans others have expressed serious concerns about the likely negative impact of the tax on the EU’s competitiveness and its relationship with the US.

Member states are currently divided on the proposal with Ireland the UK Germany Finland Sweden Luxembourg...