The independent group was asked to examine key issues relating to taxing the digital economy in the EU, and to present its ideas on the best approach to various challenges and opportunities in this field.
The main conclusions of the report include the following points:
the digital economy does not require a separate tax regime but current rules may need to be adapted;
digitisation greatly facilitates cross-border business. Removing barriers to the single market, including tax barriers, is therefore crucial;
the upcoming move to a destination-based VAT system for digital services is commended;
the VAT exemption for small consignments from non-EU countries should be removed;
BEPS will be fundamental to tackling tax avoidance and aggressive tax planning globally;
the common consolidated corporate tax base (CCCTB) provides an opportunity for the EU to expand on new international standards (such as transfer pricing profit split methods) and achieve additional simplification within the EU; and
more radical reforms of the tax system could also be looked at in the longer term, including a destination-based corporation tax.
The Commission will now consider the report and decide on policy orientations in due course.
EU tax commissioner Algirdas Šemeta said: ‘A united EU approach to tackling tax evasion and a more favourable tax environment for businesses – digital and otherwise – have been our overarching goals in recent years. I am pleased that the High Level Group very much confirms that this is where our energy and efforts must be focused in EU tax policy.’
The independent group was asked to examine key issues relating to taxing the digital economy in the EU, and to present its ideas on the best approach to various challenges and opportunities in this field.
The main conclusions of the report include the following points:
the digital economy does not require a separate tax regime but current rules may need to be adapted;
digitisation greatly facilitates cross-border business. Removing barriers to the single market, including tax barriers, is therefore crucial;
the upcoming move to a destination-based VAT system for digital services is commended;
the VAT exemption for small consignments from non-EU countries should be removed;
BEPS will be fundamental to tackling tax avoidance and aggressive tax planning globally;
the common consolidated corporate tax base (CCCTB) provides an opportunity for the EU to expand on new international standards (such as transfer pricing profit split methods) and achieve additional simplification within the EU; and
more radical reforms of the tax system could also be looked at in the longer term, including a destination-based corporation tax.
The Commission will now consider the report and decide on policy orientations in due course.
EU tax commissioner Algirdas Šemeta said: ‘A united EU approach to tackling tax evasion and a more favourable tax environment for businesses – digital and otherwise – have been our overarching goals in recent years. I am pleased that the High Level Group very much confirms that this is where our energy and efforts must be focused in EU tax policy.’
