Following on from a call for action from four EU finance ministers, the European Commission published a report on 21 September 2017 setting out the issues on how to tax digital business and some possible solutions. These included, by way of short term fixes, an ‘equalisation’ tax on insufficiently taxed digital income, or alternatively a gross withholding tax on payments to non-resident digital providers. In the longer term the EU document put its faith in the proposal for a harmonized corporate tax system in the EU – or CCCTB – to resolve the issues, in particular by incorporating new – virtual – PE rules and new transfer pricing approaches adapted to digital business models. Finance ministers from around 10 Member States have expressed support for the equalisation tax option according to media reports, and a common understanding is expected to be reached in December. More or less at the same time as the EU discussions started, the OECD has requested public input on similar issues and is expected to issue an interim report in Spring 2018.
Related Posts
European Commission publishes guidance documents to support CBAM implementation
The European Commission has published a series of ten guidance documents to help non-EU operators with the
Read More
EU: European Commission updates public CbC reporting taxonomy, technical guidance
The European Commission has updated its Public Country-by-Country (CbC) Reporting Taxonomy project, originally launched
Read More
European Commission releases Annual Tax Report (ART) providing latest insights into the revenue mix
The European Commission has presented its Annual Report on Taxation (ART), offering a detailed overview of taxation
Read More
European Commission releases final report on ATAD evaluation
The European Commission has published its final evaluation report on the Anti-Tax Avoidance Directive (ATAD) on 25 June
Read More
EC proposes tax simplification package to streamline compliance, boost competitiveness
The European Commission adopted an ambitious tax simplification package on 24 June 2026, that includes two legislative
Read More
EU issues Pillar Two compliance manual for 14 member states
The European Commission released a country-by-country compliance guide for multinationals navigating the EU's new
Read More