73944
The European Commission headquarters at the  Berlaymont Building in Brussels.
The European Commission headquarters at the  Berlaymont Building in Brussels.

EU Seeks Workable Solution to New Digital Tax System

EU Seeks Workable Solution to New Digital Tax System

European Union plans for a new taxation system for digital companies, such as Google, Skype and Amazon, all of which have European headquarters in Luxembourg, may reach “conclusions” by end-December.
A report from the European Commission in September said the challenge is to fix an international tax system first designed at the start of the last century and “is no longer fit for purpose”. It said the effective average tax rate for a traditional international business in the 28-member EU is 23.2% compared with 8.5% for a firm working to a digital domestic model, EUBulletin reported.
“We will listen to the commission’s positions because they have brought together different ideas. Their document is a good basis,” Estonian Finance Minister Toomas Toniste told reporters on Tuesday via a translator.  We want “conclusions by the end of our presidency”.
Toniste spoke before a meeting of the Economic and Financial Affairs Council—known as Ecofin—that brings together finance and economy ministers from EU nations. Relevant European commissioners are also participating in meetings, taking place in Luxembourg.
Estonia holds the presidency of the Council of the European Union. That six-month term will close at the end of 2017.
In its report, the commission set out its objectives in forming new tax rules; fairness, competitiveness, integrity of the single market and sustainability. It also offered different solutions.
One is to embed taxation of the digital economy in the general international corporate tax system. This would require “fundamental reform” to address specific challenges, such as digital companies that are able to have a significant market presence without a substantial physical presence.
The commission has announced that its preferred option, at the EU level, is the Common Consolidated Corporate Tax Base proposal. This revises rules about where a company is permanently established and uses the firm’s assets, labor and sales to calculate where its value is created, and the firm can be taxed accordingly.  
Because finding “a meaningful solution to capture and allocate the value created in the digital economy” may take a long time, it also suggested three short-term measures to protect direct and indirect tax bases in the different EU countries.
It proposed an equalization tax on the turnover of digital companies, a withholding tax on digital transactions and a levy on revenues generated from the provision of digital services or advertising activity.
“All short-term options have pros and cons, and further work is needed on the detailed approach to find a workable solution for the single market and the global economy as a whole,” the commission said in its report.

Short URL : https://goo.gl/1cidBy
  1. https://goo.gl/ABuKzS
  • https://goo.gl/H5WfpR
  • https://goo.gl/hZ5QgM
  • https://goo.gl/7kc7E1
  • https://goo.gl/eqxa1e

You can also read ...

Bithumb Hacked, $32m in Cryptocurrency Stolen
Cryptocurrencies dropped after the second South Korean...
South Africa GDP Shrinks
South African gross domestic product shrank 2.2% in the first...
Saudi Arabia, which employs about two-thirds of its citizens, is chipping away at a budget deficit that ballooned to almost 16% of GDP after the oil shock of 2014, while FDI slumped more than 80% last year.
Show up, swipe in. The routine is familiar to office workers...
Washington in March imposed tariffs of 25% on steel and 10% on aluminum, in a move mainly aimed at curbing imports from China.
Russia said on Tuesday it would impose import duties on US...
Taxes in Italy Drive Economy Underground
Italy grew rapidly over the 20th century, and its black market...
European businesses say it has become harder to do  business in China over the past year.
European companies complain they still face a tough business...
Australian Telecom Co. to Axe 8,000 Jobs
Australia’s dominant telecommunications company Telstra...
South Korea to Grow 3 Percent
The Organization for Economic Cooperation and Development has...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus