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. We have reviewed the evidence base and analytical logic of the proposal. We find that:
- The rationale for introducing DST does not reflect the evidence that digital firms pay average corporate tax rates
- The Impact Assessment (IA) for the DST does not fully consider the substantial distortions and costs to EU consumers and firms from this new tax
- Actual revenues from the proposal are likely to be significantly lower than suggested
Today, Sigurd Næss-Schmidt presents the results at a CEPS event in Brussels. Read more about the event
For further information, please contact Sigurd Næss-Schmidt