Despite hopes that agreement could be reached on the EU's proposed digital services tax (DST) before the end of the year, a compromise proposal that was put forward during the 4 December meeting of the Economic and Financial Affairs Council, did not gain the necessary support and was not discussed in detail. Amidst the failure in reaching the agreement on DST, France and German proposed new stripped-down version of digital services tax.
On 29 November 2018, the Austrian Presidency put forward a compromise text proposal containing the elements that they believe have the most support from the Member States. This proposal enacted as follow up to the initial DST proposal was made in March 2018. In particular, the proposal contains the following key elements:
In response to the compromise proposal, however, a number of delegations cannot accept the text for political reasons as a matter of principle, while a few others are not satisfied yet with some specific points in the text. That text did not gain the necessary support and was not discussed in detail.
Amidst the uncompromised DST proposal initiated with EU, France and Germany came up with the joint declaration in which both member states invite the European Commission and the Council to:
The joint declaration notes that the DST would not prevent the Member States from introducing in their domestic legislation a digital tax on a broader base such as making available to users of a multi-sided digital interface that involves users interaction and transmission of users data collection that generated from users’ activities on digital interfaces.
Both German and France as stated in the joint declaration urge the Council to adopt the legally binding directive on DST without delay and in any case before March 2019 at the latest. It will enter into force on 1st January 2021, if no international solution has been agreed upon.
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