The European Parliament’s Committee on Economic and Monetary Affairs (ECON) on March 23 adopted a motion for a European Parliament resolution on digital taxation, OECD negotiations, tax residency of digital companies, and a possible European digital tax.
The report sets out the European Parliament’s views ahead of the final negotiations on a global reform within the OECD/G20 Inclusive Framework.
Members of the European Parliament called for updating archaic international tax rules, including establishing a minimum effective corporate tax rate.
They also insisted that the EU should develop its own fall-back position if global tax negotiations falter by the end of the year. The fall-back position would include a digital services tax.
The calls took the form of a resolution the economic and monetary affairs committee, adopted by 48 votes in favor, 4 against, and 6 abstentions.
“We have asked the US to accept that a common system is needed, where no ‘safe harbour’ rules apply. We need to fight together for a solution at the G20/OECD level,” said parliamentary member Andreas Schwab. “If a global solution is not possible, the EU should make a move now. It’s time for the legislator to shape a clear and complete digital tax policy in the EU: minimum taxation across the EU, no market distortions due to national toolboxes, and tax certainty for digital companies that will benefit from harmonised and fair digital taxation.”
Current international tax rules date back to the early 1900s, with the main focus on physical presence. Taxes paid in one jurisdiction no longer reflect the value and profit created there, the committee said, leading to tax base erosion and profit shifting. The current rules also have led to traditional companies being taxed on average nearly three times as much as digital companies.
The full Parliament will take up the matter in April.
Be the first to comment