EU announces new tax plan that clamps down on digital platforms
The European Union on Wednesday announced that it has adopted a series of new tax measures that put increased pressure on digital platforms like the App Store.
Credit: European Business Magazine
The EU says that new tax package focuses on "the twin pillars of fairness and simplicity." Notably, the announcement come shortly after Apple and Ireland won an appeal in a $14.4 billion back tax case.
The new tax package is aimed at supporting "economic recovery and long-term growth" by curbing tax abuse and anticompetitive behavior while increasing transparency, the EU said.
Documentation of the plan includes tax transparency regulations that will apply to digital platforms, such as the App Store and Google Play store.
"The proposal on administrative cooperation (DAC 7) extends EU tax transparency rules to digital platforms, so that those who make money through the sale of goods or services on platforms pay their fair share of tax too," the EU said in a statement. "This new proposal will ensure that Member States automatically exchange information on the revenues generated by sellers on online platforms. The proposal also strengthens and clarifies the rules in other areas in which Member States work together to fight tax abuse, for example through joint tax audits."
The plan also introduces new mechanisms for "an automatic exchange of information" between member states for digital platform revenues. That's meant to "help tax administrations verify that those who earn money through digital platforms pay the appropriate share of taxes."
According to Reuters, the plan also seeks to shore up defenses against "corporate tax regimes of member states that have broadly harmful effects," including those known for fostering tax evasion and avoidance.
Previous attempts to change EU tax rules have been overruled by the power of veto by member states. The EU is now looking to sidestep that, Reuters reported.
The European Commission is also continuing to push ahead with a plan to tax digital platforms in the region, something that could spur a trade war with the U.S. In June, talks between Europe and the U.S. broke down after officials from the latter country reportedly left the meeting. On Tuesday, the EU said it may delay digital tax proposals until later in 2020 to avoid a transatlantic trade war.
News of the tax plan also comes in the midst of increased antitrust scrutiny for Apple's App Store and digital services, both in Europe and elsewhere across the globe.
Credit: European Business Magazine
The EU says that new tax package focuses on "the twin pillars of fairness and simplicity." Notably, the announcement come shortly after Apple and Ireland won an appeal in a $14.4 billion back tax case.
The new tax package is aimed at supporting "economic recovery and long-term growth" by curbing tax abuse and anticompetitive behavior while increasing transparency, the EU said.
Documentation of the plan includes tax transparency regulations that will apply to digital platforms, such as the App Store and Google Play store.
"The proposal on administrative cooperation (DAC 7) extends EU tax transparency rules to digital platforms, so that those who make money through the sale of goods or services on platforms pay their fair share of tax too," the EU said in a statement. "This new proposal will ensure that Member States automatically exchange information on the revenues generated by sellers on online platforms. The proposal also strengthens and clarifies the rules in other areas in which Member States work together to fight tax abuse, for example through joint tax audits."
The plan also introduces new mechanisms for "an automatic exchange of information" between member states for digital platform revenues. That's meant to "help tax administrations verify that those who earn money through digital platforms pay the appropriate share of taxes."
According to Reuters, the plan also seeks to shore up defenses against "corporate tax regimes of member states that have broadly harmful effects," including those known for fostering tax evasion and avoidance.
Previous attempts to change EU tax rules have been overruled by the power of veto by member states. The EU is now looking to sidestep that, Reuters reported.
The European Commission is also continuing to push ahead with a plan to tax digital platforms in the region, something that could spur a trade war with the U.S. In June, talks between Europe and the U.S. broke down after officials from the latter country reportedly left the meeting. On Tuesday, the EU said it may delay digital tax proposals until later in 2020 to avoid a transatlantic trade war.
News of the tax plan also comes in the midst of increased antitrust scrutiny for Apple's App Store and digital services, both in Europe and elsewhere across the globe.
Comments
Well, there's Spotify ... always crabbing they're not getting everything for free, so I doubt there's many dollars to be extracted there. Any EU big social media platforms? Big tech companies? Surely the EU hasn't been asleep for the last decade.
Or maybe they were ... and that's what's got their tits in a wringer.
(Anyone notice how poorly AppleInsider handles Safari when trying to comment on the article page? It seems I always lose my entire post when I try to post from there.)
Any tax over reach is simply going to be met with tariffs form the US. It 's a no win situation (again)
Stifling national and EU wide regulations do not reward risk taking. Cultural and social customs and conventions also discourage those who seek to upend existing market structures. The emphasis is to regulate and protect what exists today, which through regulation significantly hampers the ability of startups to disrupt existing markets and carve out new ones with innovative products or services.
Much of the population, especially the younger generation, is wise enough to realise that money is just there. We don’t need to cater to those who take risks and create jobs and investments because those people are greedy. We need to fix their greed and we won’t need to worry about any loss of money due to de-incentivising them, because money is just there, and if they were good people they’d keep doing what they do anyway. We need to create a civilisation where everyone who has money is lawfully forced to give their money to those who don’t have it, because money will always be just there.
Our economic competitors' mantra is basically: "If you can't innovate yourself, steal from or tax what the innovators do."
You're from the EU, right? Is this a typical attitude over there?
Sorta makes sense why it's so hard to think of an EU digital powerhouse. Money is just something you go out to the garden and pick off the vine when you're bored.