The European Commission is currently developing plans to tax the digital economy. According to the Commission, large digital multinationals, colloquially referred to as GAFA, only pay 10.1 % in taxes on average, compared to an EU-average tax rate of 23.2 % for traditional companies. As a result, Member States lose billions in tax revenues each year. The European Parliament calculated that due to tax optimisation, Facebook and Google saved 5.4 billion EUR in taxes from 2013 to 2015 in the EU.
This would not be possible if the principle that taxes are paid where profits are made would be respected. Besides conventional profit shifting schemes, digital multinationals pose a structural challenge to tax systems that were primarily designed for the industrial giants of the 20th century.
The status quo stands against the principle of fair taxation proclaimed by the Juncker-Commission. It damages the interests of workers, taxpayers, SMEs, and consumers in Europe. Without an EU-wide solution, Member States will be forced to come up with national solutions, thereby harming the internal market.
Is the EU ready to tackle the issue of taxing the digital economy? Should we wait for the OECD or the G20 before taking action in Europe? What are the implications of the alternative short-term measures proposed by the Commission, such as equalisation taxes and withholding taxes on digital transactions? Will trade unions and civil society have to witness a similar impasse as for the Financial Transaction Tax?
On the Panel:
Deputy Head of Business and International Tax Unit, OECD
MEP Evelyn Regner
MEP, Member of the TAXE and PANA Inquiry Committees
Head of Tax Policy Unit, Austrian Chamber of Labour (AK)
Analysis of Tax Fairness, European Commission (DG TAXUD)
The discussion will be held in German and English and translated simultaneously.
Following the discussion, we would like to invite you to join us for a buffet.