The Greens/EFA group has welcomed proposals from the European Commission on how to tax the digital economy. The European Commission will today publish two proposals:
- a stop gap measure which would see tax placed on revenues generated by the exploitation of digital activities based on user value (for example Facebook's revenues from monetising user data via advertising)
- a long term approach based on giving digital companies a permanent establishment in a Member State where it has a significant digital presence in that country. This measure is in line with the Greens/EFA position and what the European Parliament recently agreed for a common consolidated corporate tax base (CCCTB), a proposal progressing slowly in Council.
Greens/EFA tax justice spokesperson Molly Scott Cato comments:
“The digital giants have been getting a free ride for far too long. Just because a business delivers a service online doesn’t mean they don’t have the social responsibilities in the real world. The likes of Google and Facebook benefit from a healthy, educated workforce and publicly funded infrastructure – including digital infrastructure - just as much as everyone else and need to make a fair contribution.
“Action is long overdue and the Commission’s pragmatic approach is welcome. We remain convinced that a common consolidated corporate tax base is key to putting the EU on a strong footing in the fight against tax avoidance. But with the Council still dragging its heels, interim steps are needed. Facebook and others make a considerable amount of money turning our data into a saleable commodity. Putting a tax on digital firms’ use of our data would go some way to making sure these firms pay back into society."