Deadlock on digital taxation at EU level

Dec 10, 2018

The Economic and Financial Affairs Council (ECOFIN) failed to reach agreement on a digital tax at EU level at a meeting of finance ministers last week.   Even last minute proposals by France and Germany to restrict the digital tax to advertising revenue of digital businesses failed to generate support from member states opposed to an EU level digital tax Ireland and Sweden were among such member states. 

According to a press release released by ECOFIN, finance ministers engaged in a thorough analysis of all technical issues. The Austrian presidency put forward a compromise text which was deemed unacceptable for political reasons by a number of member states, while other member states were not satisfied with some specific points contained within the text.

Ministers also examined a joint declaration by the French and German delegations which firstly suggests restricting the digital tax to advertisement revenue generated by digital businesses and secondly, to align EU proposals on taxing the digital economy with the work of the OECD.   The Austrian presidency concluded the debate with a recommendation that the Council working group continues working on the basis of the latest compromise text and the elements proposed by France and Germany.