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European Commission consults on reforming the international tax rules affecting digital businesses.
The European Commission has published a consultation on reforming international tax rules affecting digital businesses.
The commission has put forward proposals to solve some of the taxation problems that digitalisation brings. It believes that a two-step approach might be needed: first, a targeted, temporary solution followed by a comprehensive, long-term one.
The temporary options are:
- tax on revenues from digital activities;
- withholding tax on digital transactions;
- tax on revenues from digital services; and
- a digital transaction tax.
The long-term proposals include:
- modifying the common consolidated corporate tax base;
- new EU rules for permanent establishments;
- destination-based corporate taxation;
- a unitary tax on a share of worldwide profits; and
- a residence tax base with a destination tax rate.
The commission is keen to find a solution at international level, given the global nature of the problem.
The deadline for responses is 3 January 2018.
