December 1st, the European Union Council of Economy and Finance held a videoconference, focusing on informing the ministers of member states of the draft amendment to the directive on strengthening administrative cooperation in the field of taxation, and exchanging views on the next step to continue international tax negotiations within the framework of the Organization for Economic Cooperation and Development.
German Finance Minister Scholz said in his chairmanship on the same day that EU member states have reached agreement on the draft amendment at the technical level, and the EU Economic and Fiscal Council is expected to formally adopt the draft in the next few weeks.
According to the revised directive, starting from 2023, the tax departments of EU member states will exchange information on the income of buyers on digital platforms, which will help to stop tax evasion and avoidance related to such sales activities and create a level playing field between different platforms and different sellers. Scholz said that taxing digital platforms is not only a key link in the EU to strengthen tax fairness and efficiency, but also one of the important components of the EU’s long-term budget in the post-epidemic era.
Regarding the digital service tax of outside concern, the Vice President of the European Commission, who attended the meeting on December 1, said that if the negotiations under the framework of the OECD remain fruitless by mid-2021, the European Commission will propose its own proposal for the collection of a digital service tax.
Previously, the EU had sought to reach a multilateral agreement on the international tariffs of digital services tax within the framework of the OECD.
However, the U.S. Treasury Department announced its withdrawal from the negotiations in June, which aroused dissatisfaction among many European countries.
At present, France has announced the resumption of the digital service tax collection plan in December, and several American Internet giants have been levied.
Public opinion believes that this move is likely to ignite trade tension between the United States and Europe again, triggering a new round of tariff retaliation by the United States against Europe.
