The impact of an EU digital service tax on German businesses

On 21 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:

In the Commission’s preferred option, a carefully selected subset of digital firms should face the DST, specifically firms with more than €750 million in global revenue, and having above €50 million in EU digital revenue. This could leave the impression that only global MNEs would be affected by the tax and ultimately leaving (most) German businesses unaffected.

However, in this study we find that:

The study is commissioned by Bundesverband E-Commerce und Versandhandel Deutschland e.V.

On 24 October 2018, Bertelsmanns Stiftung – a German think-tank – and Copenhagen Economics held a seminar i Berlin discussing the future of taxation for the digital economy and how to promote the digital- and other knowledge-intensive industries in the EU. In this context, Partner Sigurd Næss-Schmidt recapped the key messages from our study on DST and outlined some of the key challenges that needs to be addressed in the context of getting a robust tax system in place which promotes the value creation and innovation at national and global level. Download the presentation from the event.