In March 2018, the European Commission proposed a Digital Services Tax (DST) as a new tax on revenues resulting from certain digital business activities. Specifically, a 3% tax on: (i) online advertising revenues, (ii) seller/buyer fees to transact via online intermediaries/marketplaces and (iii) revenues from the sale of user data.

The Commission’s proposal stipulates that only firms with more than €750 million in global revenue, and more than €50 million in EU digital revenue should face the DST, leaving the impression that only global MNEs would be affected. However, in this study we find that:

• The tax burden of the DST – related to services provided to the German market – will at least partly, if not fully, be passed through to German businesses and consumers.
• The DST is a distorting tax on the digital infrastructure that German businesses (most notably SMEs) rely upon to reach more customers at lower costs.
• The DST will impact a growing and important part of the German economy.

Learn more about the study

For further information, please contact Helge Sigurd Næss-Schmidt