Users, Data, Networks A Proposal for Taxing the Digital Economy in the European Single Market. Bertelsmann Stiftung Policy Paper 12 March 2019

Schneemelcher, Pola and Dittrich, Paul-Jasper (2019) Users, Data, Networks A Proposal for Taxing the Digital Economy in the European Single Market. Bertelsmann Stiftung Policy Paper 12 March 2019. [Policy Paper]

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Abstract

Fair taxation of digital businesses will be a key issue in the forthcoming European election campaign. The debate will most likely revolve around the introduction of a new “digital tax” on companies’ turnover, as proposed by the European Commission, for example. In the short term this may be a workable solution, but it does not solve the real underlying problem: the current rules on corporate taxation in the EU are not fit for purpose when it comes to dealing with digital value creation. That is what we want to change with our proposal. To this end, we define clear criteria and principles for assessing digital value creation in company taxation, which should apply EU-wide. Our contribution thus fills a central gap even of those current proposals that do not envisage a new tax, but aim at a change in the system itself.

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