ECIPE Webinar: A Digital Levy for Europe? What to Expect from the EU’s Revived Digital Tax Initiative

Some policymakers argue that the EU needs a tax on digital services to respond to recent developments and challenges of the digital economy. The European Commission suggests that new EU-imposed regulatory policies would be required to promote digitalisation in the Member States to increase productivity and benefit consumers. At the same time, with its recharged digital levy initiative, the Commission proposes to tax digital companies, which would otherwise fail to contribute their fair share to society.

Academics, tax professionals and industry experts caution that new taxes on digital services would undermine the process of digitalisation in the EU, result in double taxation and over taxation of companies, particularly SMEs that extensively use online services to market their products and services in the EU and globally. It is also argued that debates about new taxes on digital services distract political capital away from much more pressing needs for tax reform in the EU, e.g. differences in national VAT law and direct taxation of labour and capital.