Taxation of the digital economy - a BusinessEurope position paper

Key messages

• BusinessEurope believes that agreements on changes to international tax rules regarding the digitalised economy should take place at the global level. This can ensure a global level playing field encompassing all major tax jurisdictions. We therefore welcome the European Commission’s efforts to find a global solution to issues around digital taxation and believe discussions at international level should be intensified.
• However, we are concerned that the European Commission’s proposal for a short-term solution for a Digital Services Tax (DST), breaks with the international convention of taxing company profits not revenue, and thus risks increasing double taxation of companies as well as damaging our competitiveness, jobs and investment if applied unilaterally in the EU.
• The OECD will already in 2019 present another report on the matter and will issue a final report in 2020. Whilst allowing the OECD a reasonable opportunity to reach global agreement, the European Commission should, in parallel, to its joint and continued efforts with the OECD, undertake a thorough analysis with a view to identifying ways forward for the EU to address any clearly identified distortions in the taxation of the profits of digital and non-digital businesses, without undermining the competitiveness of EU industry. All analysis and impact assessment conducted by the European Commission should be made public. One of the objectives, while respecting the sole competence of Member States in the field of taxation, must be to avoid any unilateral action by Member States.