The European Commission has launched a consultation on policy solutions to the problems associated with taxing the digital economy.
The aim of the consultation is to help the Commission in defining an approach to the taxation of the digital economy. The Commission's goals include fairer and more effective taxation, supporting public revenue, and ensuring a level playing field across businesses. It also wants the new system to support EU growth and competitiveness through the Digital Single Market.
Tax Commissioner Pierre Moscovici said: "Nobody can deny it: our tax framework does not fit anymore with the development of the digital economy or with new business models. 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 consultation takes the form of a questionnaire. It explains that the Commission is "exploring possible options to solve some of the taxation problems that digitalization brings."
It states that the Commission "believes that a two-step approach might be needed: first a targeted, temporary solution followed by a comprehensive, long term one."
As regards the temporary solutions, the consultation explains that the following options have been identified:
The possible long-term solutions are as follows:
Respondents are asked to indicate how far they believe each of these options would help to solve the issues identified.
The consultation will close on January 3, 2018.
The Commission is currently working on new proposals on digital taxation, which it will present in early 2018. The contributions to the consultation and a report on the feedback received will be published in the first quarter of 2018.