On September 9, Finance Ministers of France, Germany, Italy and Spain jointly issued a political statement. In the document, the Member States appealed the European Commission to take more effective measures to plug tax evasion by digital economy.
Supplementary of the Existing Anti-Avoidance work
The Member States affirmed the existing efforts at the G20/OECD level and the Union level. The proposals for directives on a Common Consolidated Corporate Tax Base (CCTB and CCCTB) at Union level are thought to be useful and should be continued. But these initiatives are still inadequate and must be complemented with more effective solutions. For example, the European Commission is expected to establish alleged “equalization tax” on the turnover generated in Europe by the digital companies, and the amount raised would to a certain extent reflect what these companies should contribute in terms of corporate tax. In particular, this proposal is practical without calling into question the essential work on CCTB and CCCTB.
Taxation on Digital Economy: Joint Efforts for EU
The countries reaffirmed the active demand for tax fairness and tax sovereignty in the statement: “We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries.” Under current international tax framework, taxation on digital economy is described as “the major challenge for the European Union” by the ministers. Alongside this announcement, Estonia also proposed similar idea before the informal EU finance ministers meeting on September 15.
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):