Is This Fair?
The European Commission tax plans only came about after the UK floated its own version in November 2017. The commission, led by a rotating presidency – currently Austria -- said it wants to push through its plan this year to prevent member states from developing individual solutions, and creating a patchwork of tax regulations that varies by country.
In a set of talking points, the European Commission said these new tax laws are needed to capture revenue from companies that do business inside members states without being present or having a physical location in that country. The EC said current tax rules also fail to recognize the new ways in which profits are created in the digital world, in particular “the role that users play in generating value for digital companies.”
“The European Union needs a modern taxation system, which reflects the developments in our economies,” said Valdis Dombrovskis the current European Commission Vice-President for the Euro and Social Dialogue, in a statement provided by the EC. “One of the main developments is that companies and entrepreneurs are increasingly operating in the digital environment … it is important that digital companies pay their fair share of tax. While we have to work towards a long-term solution on digital taxation, preferably in the OECD or at G20 level, the Commission fully supports the Austrian Presidency in its efforts to swiftly adopt our proposal for an interim solution – a digital services tax."
