European finance ministers remained far apart on negotiations over the proposed EU digital services tax (DST) at the economic and financial affairs council (ECOFIN) meeting on 6 November.
The DST at 3% on certain activities of multinational digital businesses was proposed as an interim measure to be applied until an international approach to digital taxation can be agreed and implemented at OECD level.
Sweden, Denmark and Ireland remained firmly opposed to the DST, while France and Germany have scaled back their ambitions for an EU tax, agreeing instead to wait for the outcome of the OECD’s efforts in 2020.
Speaking after the meeting, European Commission vice-president Valdis Dombrovskis said the Commission and the Austrian presidency were still hoping for agreement to the DST at the December meeting of ECOFIN, to prevent ‘fragmentation in the single market’, as several member states press ahead with their own digital taxes. Dombrovskis nevertheless reiterated the Commission’s position that ‘an ambitious global deal remains our preference’.
Besides political differences, the DST has also faced technical and legal challenges over whether it constitutes an indirect tax which could be harmonised among EU member states under TFEU art 113, or a more fundamental change requiring implementation under TFEU art 115.
European finance ministers remained far apart on negotiations over the proposed EU digital services tax (DST) at the economic and financial affairs council (ECOFIN) meeting on 6 November.
The DST at 3% on certain activities of multinational digital businesses was proposed as an interim measure to be applied until an international approach to digital taxation can be agreed and implemented at OECD level.
Sweden, Denmark and Ireland remained firmly opposed to the DST, while France and Germany have scaled back their ambitions for an EU tax, agreeing instead to wait for the outcome of the OECD’s efforts in 2020.
Speaking after the meeting, European Commission vice-president Valdis Dombrovskis said the Commission and the Austrian presidency were still hoping for agreement to the DST at the December meeting of ECOFIN, to prevent ‘fragmentation in the single market’, as several member states press ahead with their own digital taxes. Dombrovskis nevertheless reiterated the Commission’s position that ‘an ambitious global deal remains our preference’.
Besides political differences, the DST has also faced technical and legal challenges over whether it constitutes an indirect tax which could be harmonised among EU member states under TFEU art 113, or a more fundamental change requiring implementation under TFEU art 115.
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