Parliament pushes forward with plan for digital tax

On the initiative of the EPP Group, the European Parliament is the first EU Institution to come forward with a concrete plan to tax digital giants such as Google, Facebook and Amazon.

"Without Europe-wide rules on how to tax digital companies, we will never have fairness in corporate tax. The principal of taxing companies where the value is created must also apply to the digital economy", said Alain Lamassoure MEP and Markus Ferber MEP today ahead of the vote in Parliament's Committee on Economic Affairs on the so-called Common Consolidated Corporate Tax Base (CCCTB).

MEPs wrote the new digital taxing rules into the draft law which aims to harmonise the corporate tax base all over Europe, which originally did not address the problem of digital tech giants.

"We do not want to unitise corporate tax rates, but we want to harmonise what is taxed and where we tax. The level of taxation should still be decided by each Member State", explained Lamassoure and Ferber. Lamassoure and Ferber are respectively Parliament’s Rapporteur and the EPP Group's Shadow Rapporteur on the two parts of the law project which would fundamentally change how companies are taxed all over Europe.

We do not want to unitise corporate tax rates, but we want to harmonise what is taxed and where we tax. A Lamassoure MEP and M Ferber MEP

Lamassoure emphasised that the transitional period between introducing the Common Corporate Tax Base (CCTB) and allowing companies to set off the earnings in one country against the losses in another country (CCCTB) must be as short as possible. "We want both parts of the law to enter into force at the same moment. A transition period would just create new problems. A transition period would be an excessive consideration for the naysayers among national finance ministers", Lamassoure said.

Ferber stressed that a common consolidated corporate tax base would be a significant simplification for companies who operate in more than one country. "Today you need an army of lawyers, tax specialists and accountants if you want to operate across several EU Member States. The differences in national corporate tax laws create loopholes. We want to end the inconsistencies and put an end to Member States playing off one another", Ferber said.

The European Commission is expected to make a formal law proposal for a digital tax on 21 March.