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EU mulls digital levy for fair recovery

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EU mulls digital levy for fair recovery

E-commerce - Image by Varun

(BRUSSELS) - The European Commission has launched a public consultation on a new digital levy, saying it wants to to ensure fair taxation in the digital economy, while at the same time contributing to Europe's recovery.

Fair taxation and ensuring that Europe is 'fit for the Digital Age' are top priorities for the EU executive, which says tax systems have been lagging behind global technological developments over the past number of years.

The result is that digital companies are paying 'much less tax than they should'.

The COVID-19 crisis has exacerbated the situation, says the Commission, as it has accelerated the transition towards a more digital world and boosted profits and revenues for many online companies.

The digital levy would help to ensure that EU rules are fit for purpose in the digital economy, and that companies, whether digital or not, compete in Europe on fair terms, and in doing so contribute to the recovery.

"Today's public consultation marks an important step towards our ultimate goal of ensuring the fair taxation of the digital economy," said Economy Commissioner Paolo Gentiloni: "Achieving this goal is even more important in the current context. COVID-19 has caused an unprecedented economic shock and as we work to build a sustainable recovery, it is vital that all companies make a sufficient contribution to this effort."

The launch of the consultation follows a mandate given by the European Council in July 2020 to come up with a proposal for a new own resource by June 2021.

The Commission says the levy will be designed in a way that is consistent with the ongoing work at the OECD, and in the G20, and will be compliant with WTO and other international obligations.

The public consultation will run for 12 weeks. All interested parties are invited to share their views.

A fair & competitive digital economy - digital levy - consultation

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