National digital taxes – Lessons from Europe

Abstract

Digitalisation has done more to shape the 21st century than virtually any other phenomenon. However, international tax law has seemingly failed to keep pace with rapid technological developments, which has likely led to inequalities between the tax burden of traditional and digital business models. Thus far, there has been no consensus regarding the issue of fair taxation of the digital economy at the international and EU level. As European policymakers have begun to experience noticeable amounts of pressure to act, several EU countries have pushed forward and introduced unilateral measures to ensure they receive a fair share of the tax revenues pie.

However, it is unclear whether national digital taxes can overcome the tax challenges stemming from the increasing digitalisation of the economy. Thus, newly proposed and implemented national digital taxes in Europe are thoroughly elaborated in the context of their relationship with double tax treaty law, the perils of double/multiple taxation, their coherence with European law, their global and regional impact on competition and competitiveness, their contribution to tax revenues and the establishment of fair taxation conditions. The analysis concludes with a presentation of pertinent suggestions regarding national and supranational tax policy.

Keywords:

• Digital Tax
• Digital Economy
• BEPS
• Unilateral Measures
• Global Competition
• Double Tax Treaties