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Europe’s executive body has revealed more of its thinking on reforming taxation rules to reflect how digital businesses operate, issuing details of proposals it’s considering ahead of another meeting of EU ministers next week.
Options on the table for EU countries to discuss are a turnover tax, a levy on Internet ads or withholding money on Internet transactions, the EC said today.
Week - Group - European - Union - Finance
Last week a group of European Union finance ministers, led by France, called for a turnover tax on tech giants — aka what’s also referred to as an “equalization tax” — which would seek to avoid the problem of multinationals shifting profits to lower tax economies by taxing them on the revenue generated in each nation.
At the time the EC said it welcomed the Member State’s interest in the issue, noting it has been working towards tax reform proposals for “a number of years”.
Today - Tax - Base - Erosion - Profit
Today it said it wants to see if it can tackle tax base erosion and profit shifting in the short term by focusing on tech firms — while it continues to try to advance a longer term tax reform agenda based on adjusting a proposed Common Consolidated Corporate Tax Base (CCCTB) system to allow for virtual establishment (to get around the issue of digital services being able to cross borders without a company necessarily having to have a permanent bricks-and-mortar presence in a country).
International-level discussions on tax reform have been ongoing for several years, involving the EC and other bodies such as the OECD, the WTO and the G20.
Press - Conference - Today - EC - VP
At a press conference today, EC VP Valdis Dombrovskis said: “At EU level, the [CCCTB] proposal offers a basis to address key challenges, for example by further adjusting permanent establishment rules. We propose to examine enhancements to these rules to ensure that they effectively capture digital activities.
“However, this may...
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