A majority of MEPs in the European parliament have signalled support for amendments to the proposed tax on digital services to include companies such as Netflix and lower the taxable revenue threshold to include more companies
The opinions were modifications to the EU’s planned digital services tax. The first added to the list of services which qualify as taxable revenues so that it now includes the supply of ‘content on a digital interface such as video, audio, games, or text using a digital interface’. This would mean that online platforms selling digital content or streaming services, such as Netflix, would be taxable.
Ministers also agreed on a second opinion stating that the minimum threshold, above which a company’s revenues are liable to be taxed, should be lowered from €50m (£44.9m) to €40m, significantly increasing the number of companies that would become liable. It has been estimated that the levy could bring in as much as €5bn in tax annually.
Ministers voted overwhelmingly in favour of two opinions, with 451 votes for the motion versus 69 against, and 64 abstentions.
It was stressed at the plenary session that the digital services tax is intended as a temporary measure pending decisions reached by the OECD regarding a broader international framework for taxing digital giants. The amendments will be discussed and ratified by the European parliament, with the current timeframe aiming for this to be done before the end of its mandate in April 2019.
The rapporteur on the digital services tax, Paul Tang, said: ‘Both the European parliament and the European people want tech giants to pay their taxes. That is why we voted for a more ambitious digital service tax, also taxing revenues from online streaming services. We are talking about basic fairness, where everyone pays their fair share.’
Polish MEP Dariusz Rosati called for immediate action on the tax, saying: ‘Taxes have to be paid where a company creates its value - irrespective of if it is a digital or a traditional enterprise.
‘The quarrels and mutual vetoes in the Council lead to the EU being unable to tackle this problem. The European Union should be a trendsetter, while also continuing to work on an international solution at OECD level. It is high time to act.’
Report by James Bunney