Brussels, 28 May 2014
Taxation of the Digital Economy: High-level Expert Group presents final report
The European Commission has today received the final report of the High-level Expert Group on Taxation of the Digital Economy. This independent group was asked to examine key issues related to taxing the digital economy in the EU, and to present their ideas on the best approach to various challenges and opportunities in this field. Former Portuguese Finance Minister Vítor Gaspar, who was nominated as Chair of the Group, presented the report to President Barroso and Commissioner Šemeta this afternoon. It was completed after 5 months work by the Group, which consisted of 6 other experts from across Europe with different expertise relevant to this area (MEMO/13/1042).
President José Manuel Barroso said: "With the crisis focusing attention on public finances, the issue of fair taxation has moved up the agenda, for both governments and citizens. A strong and fast-growing digital sector is good for our economy, but we must also think about how best to adapt our tax systems to the online world. I welcome the report by Vítor Gaspar and the expert group, which the Commission will now study with interest and draw conclusions in due course."
Vítor Gaspar said: "Digitisation opens exciting opportunities for entrepreneurs and for people in general. It also creates challenges and opportunities for tax systems and for tax administrations, which will have to adapt to the new realities. It has been inspiring for me to work with a group of knowledgeable and motivated people. I trust our Report contributes to progress in the international tax policy debate."
EU Tax Commissioner Algirdas Šemeta said: "A united EU approach to tackling tax evasion and a more favourable tax environment for businesses – digital and otherwise - have been our overarching goals in recent years. I am pleased that the High Level Group very much confirms that this is where our energy and efforts must be focused in EU tax policy. I warmly thank Vítor Gaspar and the other members of the group for the diligent work they have done. Their report provides very good food for thought in determining our overall policy for taxation and the digital economy, now and in the longer term."
EU Digital Commissioner, Neelie Kroes added: "This is no longer about a "digital sector" – it's about an entire economy that's going digital. It is about creating the conditions for growth and jobs. I also welcome that the group is not just seeing digital as a challenge from a tax perspective, but also as a solution for simplification, transparency and innovation in the taxation area".
The report from independent experts covers taxation issues linked to the digital economy in the broadest sense, looking at indirect (VAT) and direct (corporate) taxation, as well as wider issues on how tax policy can help maximise the opportunities that the digital economy offers.
Among the main conclusions of the report are:
The Commission will now consider the report and decide on policy orientations in due course.
The expert group on taxation of the digital economy was set up following discussions at the May 2013 European Council, when EU leaders pointed out that efforts are required to respond to the challenges of taxation in the digital economy. In October 2013, EU leaders welcomed the Commission's initiative to set up the expert group, which met for the first time last December.
For the report and executive summary, see:
Homepage of Commissioner Šemeta:
Follow Commissioner Šemeta on Twitter: @ASemetaEU