Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

THE EU TAKES A STAND ON TAXATION OF THE DIGITAL ECONOMY

In the May edition of our newsletter, we have reported the initiative of the OECD to find new ways to tax internet-sourced wealth, especially in light of reports showing multinational organizations shifting their internet-sourced profits to zero or low-rate corporate tax jurisdictions. It seems that the European Commission is right on cue with OECD’s latest initiative, having assembled a group of six experts across the EU with different backgrounds in order to brainstorm on the possible solutions to this growing problem. Mr. Vítor Gaspar, former finance minister of Portugal, chaired the Group of experts and the main conclusions following deliberations that span over the previous five months are as follows:

  • THE EU TAKES A STAND ON TAXATION OF THE DIGITAL ECONOMY 2At present, the digital economy does not require a separate tax regime. Current rules may need to be adapted to respond to the digitisation of our economy;
  • Digitisation greatly simplifies cross-border business, hence removing barriers, including tax barriers, and creating a more favourable business environment through neutral, simplified tax rules is more important;
  • The upcoming move to a destination-based VAT system for digital services is welcomed. The report suggests that this could be further expanded to all goods and services (in business-to-consumer transactions) in the future;
  • To ensure neutrality for EU business, the Group recommends the removal of the VAT exemption for small consignments from non-EU countries supported by a One Stop Shop and a fast track customs procedure;
  • In the area of corporate taxation, the G20/OECD Base Erosion and Profit Shifting (BEPS) project will be fundamental to tackling tax avoidance globally. Member States should take a common position to ensure a favourable outcome for the entire EU;
  • Priority areas for the EU within the BEPS project, according to the report, are facing strong tax competition, revising transfer pricing rules and reviewing concepts for applying taxation;
  • The Common Consolidated Corporate Tax Base (CCCTB ) provides an opportunity for the EU to expand on new international standards and achieve additional simplification within the EU;
  • Further reforms of the tax system, such as destination-based corporation tax, might also be taken into consideration in the future.

At current stage the Commission will examine the report and make its final decisions on new policies affecting the digital economy.