The European Parliament Committee on Economic and Monetary Affairs has published draft reports on proposed amendments from the different committee members in relation to the European Commission's proposals for the taxation of the digital economy.
The first draft report concerns corporate taxation of a significant digital presence, with proposed amendments ranging from an outright rejection of the proposed directive to early adoption without waiting for international consensus reached through the work of the OECD, with an overall positive take on the proposal. Some particular areas of focus include providing for a harmonized definition of permanent establishment and the (re)negotiation of individual EU Member States tax treaties to include provisions on significant digital presence.
The second draft report concerns the common system of a digital services tax on revenues resulting from the provision of certain digital services. The proposed amendments in this report are less positive than those in relation to the significant digital presence proposal, including additional calls to wait on proposals from the OECD for a global solution, as well as proposals to amend the language to ensure that any digital services tax is on for the short-term and that focus is given to rules for significant digital presence. However, several proposed amendments are included to even increase the tax rate and expand the scope of the digital services tax, including expanding the types of services covered and lowering the relevant thresholds along with protections for smaller companies and start-ups.
Discussions on proposed amendments will continue in the Committee, with the final proposed amendments to be voted on in Committee in December and in the plenary in January, after which the parliament's position will be passed to the EU Council for adoption.