you're reading...
Economic and Social Policies, PUBLICATIONS

Interim digital services tax on revenues from certain digital services [EU Legislation in Progress]

Written by Marcin Szczepański (2nd edition, updated on 7.12.2018),

Time for taxes keyboard key. Finger

© momius / Fotolia

According to the European Commission the digital economy is relatively under-taxed when compared with traditional businesses. Certain inherent characteristics such as reliance on cross-border provision of services without physical presence, easy transfers of intangible assets, and novel ways to create value make it particularly easy for enterprises to limit their tax liabilities.

In order to provide a solution to this problem, in March 2018 the Commission adopted the ‘fair taxation of the digital economy’ package, comprised of two proposals. One concerns a permanent reform of corporate tax regime while the second is a proposal for a directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services, which would apply as an interim measure until the permanent reform has been implemented. The tax is to cover businesses above two thresholds: total annual worldwide revenues exceeding €750 million and annual revenues in the EU exceeding €50 million. The proposed single rate is at 3 %, levied on gross revenues resulting from the provision of certain digital services where user value creation is essential.

Parliament’s Committee on Economic and Monetary Affairs (ECON) adopted a report proposing to widen the scope and reach of the tax. The plenary vote is expected during the December session.


Proposal for a Council directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 148
Rapporteur: Paul Tang (S&D, the Netherlands) 2018/0073(CNS)
Shadow rapporteurs:



Gabriel Mato (EPP, Spain)
Ashley Fox (ECR, UK)
Petr Ježek (ALDE, Czech Republic)
Martin Schirdewan (GUE/NGL, Germany)
Eva Joly (Greens/EFA, France)
Marco Valli (EFDD, Italy)
Barbara Kappel (ENF, Austria)
Consultation procedure – parliament adopts only a non-binding opinion
Next steps expected: Vote in plenary

timeline step 5 on 7 voted in plenary

Leave a Reply

Download the EPRS App

EPRS App on Google Play
EPRS App on App Store
What Europe Does For You
EU Legislation in Progress
Topical Digests
EPRS Podcasts

Follow Blog via Email

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 3,544 other subscribers

RSS Link to Members’ Research Service

Disclaimer and Copyright statement

The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.

For a comprehensive description of our cookie and data protection policies, please visit Terms and Conditions page.

Copyright © European Union, 2014-2019. All rights reserved.

%d bloggers like this: