The US Proposals on Digital Services Taxes and Minimum Tax Rates: How the EU Should Respond

Summary:

The 37 member-states of the Organisation for Economic Co-operation and Development (OECD) are currently negotiating a global replacement for national Digital Services Taxes (DSTs), aiming for a mid-2021 agreement. The OECD countries that already have DSTs have generally promised to revoke them in the event of an OECD agreement. The Biden administration has its own agenda in the OECD negotiations: the US is pushing a proposal for a global minimum corporate tax rate that could be applied in addition to a market jurisdiction tax. The minimum tax rate proposal would entitle countries to increase taxation on firms’ profits, if those profits were only taxed elsewhere below the global minimum rate. The intention is to reduce incentives for US firms to shift profits to low-tax countries. On both these issues, a deal based broadly around the current US proposal is a realistic possibility and is in the EU’s interests.

• Alternative Source 1

Commentary and Analysis

EPRS: Briefing: December 2018: Interim digital services tax on revenues from certain digital services https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)625132

EPRS: Briefing: December 2020: Digital Services Act – Pre-legislative synthesis of national, regional and local positions on the European Commission’s initiative https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2020)659369

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ESO Records

European Commission: COM (2018) 148: Proposal for a Directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services https://www.europeansources.info/record/proposal-for-a-directive-on-the-common-system-of-a-digital-services-tax-on-revenues-resulting-from-the-provision-of-certain-digital-services/

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