The Commission proposals on digital taxation need a higher tax
rate, a wider scope and clearer definitions, said the lead MEPs on
Tuesday when presenting their draft reports.
The rapporteurs, Dariusz
Rosati (EPP, PL) and Paul
Tang (S&D, NL) both supported the need for the
EU to come forward with a common approach on taxing digital
companies arguing that the public demanded action, not enough
progress was being made at the OECD level, and if the EU did not
act as one, some member states would go it alone.
They therefore backed the overall direction of the Commission
proposals for the two legislative text on the table, while
proposing certain amendments.
The two
proposals concern a temporary measure to establish a
tax on revenue from the provision of certain digital services,
while the second is the definitive measure aiming to establish a
full-fledged corporate taxation of companies wherever they have
“a significant digital presence”.
Corporate taxation of significant digital
presence
Mr Rosati declared himself broadly in agreement with the
Commission proposal and focussed his proposed
improvements on fleshing out how the concept of
“significant digital presence” is to be defined. For this,
he proposes that the Commission come forward with guidelines to
help authorities and companies define such presence and that the
DigiTax committee be granted additional competences to those
given to it by the Commission to better oversee the observing of
the rules and help member states to share
information.
Mr Rosati also proposes a more explicit exclusion from the scope
for SMEs.
Temporary system for digital taxation
Ahead of reaching agreement on the more far-reaching definitive
corporate tax system, the Commission also proposed a shorter-term
measure which would see a tax applied to revenues from certain
digital services.
Mr Tang proposed three main
changes to the Commission proposal. First that the tax rate
should be set at 5% and not 3%. Secondly, to widen the
scope of the directive to ensure that the largest digital
companies were also covered by it, such as Amazon. Thirdly,
to undertake an audit of the national tax authorities which would
be tasked with collecting the European tax to ensure they had the
capacity to do so and reassure all member states of this.
Next steps
Discussions between MEPs of the economic and monetary affairs
committee will continue and a vote to adopt changes to the
Commission’s proposals is scheduled for 3rd December. The
plenary would then adopt its position in January. After
that the Parliament’s position will be passed on to the Council
which will be called upon to adopt a final version of the texts.
