The European Commission has followed up its recent communication on plans for reforming international tax rules affecting digital businesses with a consultation seeking views on problems with the current system and on the Commission’s specific proposals. Topics include:
the three main taxation challenges that digitalisation brings for businesses and for national tax systems;
the most important objectives to pursue when designing future legislative proposals for the digital economy;
whether SMEs should be exempt from a possible digital tax; and
to what extent the Commission’s proposed solutions (both long term and ‘quick fix’) would solve the current problems.
The Commission’s long term proposals included:
modifying the common consolidated corporate tax base (CCCTB);
new EU rules for permanent establishments;
destination-based corporate taxation;
a unitary tax on a share of worldwide profits; and
a residence tax base with a destination tax rate.
The ‘quick fix’ EU level options included:
tax on revenues from digital activities;
withholding tax on certain digital transactions;
tax on revenues from certain digital services; and
a digital transaction tax.
See here. The deadline for responses is 3 January 2018. These responses will feed into a report to be published early next year, which will form the basis for the EU’s contribution to international discussions involving the OECD and the G20 in spring 2018. The Commission has restated its preference for solutions to be found at international level.
The European Commission has followed up its recent communication on plans for reforming international tax rules affecting digital businesses with a consultation seeking views on problems with the current system and on the Commission’s specific proposals. Topics include:
the three main taxation challenges that digitalisation brings for businesses and for national tax systems;
the most important objectives to pursue when designing future legislative proposals for the digital economy;
whether SMEs should be exempt from a possible digital tax; and
to what extent the Commission’s proposed solutions (both long term and ‘quick fix’) would solve the current problems.
The Commission’s long term proposals included:
modifying the common consolidated corporate tax base (CCCTB);
new EU rules for permanent establishments;
destination-based corporate taxation;
a unitary tax on a share of worldwide profits; and
a residence tax base with a destination tax rate.
The ‘quick fix’ EU level options included:
tax on revenues from digital activities;
withholding tax on certain digital transactions;
tax on revenues from certain digital services; and
a digital transaction tax.
See here. The deadline for responses is 3 January 2018. These responses will feed into a report to be published early next year, which will form the basis for the EU’s contribution to international discussions involving the OECD and the G20 in spring 2018. The Commission has restated its preference for solutions to be found at international level.
