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Commission launches digital tax consultation
Luxembourg

Commission launches digital tax consultation

27.10.2017 From our online archive
The Commission has been tasked with bringing forward proposals on digital taxation in early 2018, following discussions at the European Council.

The European Commission has launched a public consultation on how to best raise taxes on digital companies, like Amazon and Google.

The Commission has been tasked with bringing forward proposals on digital taxation in early 2018, following discussions at the European Council.

"Nobody can deny it: our tax framework does not fit anymore with the development of the digital economy or with new business models,” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said.

"Member states want to tax the huge profits generated by digital economic activity in their country. We need a solution at EU level, bringing robust solutions for businesses and investors in the single market."

The Commission said it wants to ensure the digital economy is taxed in a "fair and growth-friendly way".

The public consultation, which will run until January 3 2018, is intended to gather views on the main problems relating to taxing the digital economy for countries and businesses, as well as possible solutions.   

The Commission's preferred option is to change the way digital companies are taxed through its broader Common Consolidated Corporate Tax Base (CCCTB) proposal, which would use the firm's assets, labour and sales to calculate where its value is created, and tax the firm accordingly.

Luxembourg opposes an EU-only approach to raising tax on digital giants. Prime Minister Xavier Bettel won a major political victory last week when he secured a reference to the Organisation for Economic Co-operation and Development (OECD) in written conclusions adopted at a Council summit.

Every EU member state also currently has a veto on EU-wide tax changes, but countries could lose this right under a separate Commission proposal to use so-called 'passerelle clauses' to switch from unanimous agreement to a majority vote on certain issues.

(By Hannah Brenton, hannah.brenton@wort.lu, +352 4993 728)