The European Digital Tax
France and Germany are the two major European economies right now. These are the countries that are driving the European Union as the rest of the members of the EU are under severe financial duress. It would be fair to assume that these two countries have considerable clout in the European Union. Hence, if they decide to implement some kind of policy change it is almost a done deal.
This is the reason why Germany and Frances support for the introduction of a digital tax has sent shivers up the spine of many multinational corporations.
In this article, we will have a closer look at the proposed digital tax and the impact that it will have on the wider economy in Europe.
German Chancellor Angela Merkel has publicly stated that Germany will discuss the digital tax in the next European Union meeting in Brussels. She clarified that the digital tax will indeed be implemented in Europe very soon. It was not a question of whether it would be implemented, that is a foregone conclusion. The real question is how the tax should be implemented.
Countries like Ireland, Sweden and Denmark are against the proposal. However, Germany is hopeful that these countries will be convinced soon. If the digital tax is indeed implemented, there will be a 3% tax on the revenue of digital sales. These taxes will be liable to be paid in the jurisdiction of the consumer as opposed to the jurisdiction of the vendor.
Lets have a closer look at the pros and cons related to this proposal.
Germany and France are seeing some major benefits that can be reaped by implementing this new tax. Some of them are as follows:
The proposal to implement digital tax is riddled with many flaws. Some of them are listed below.
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