The EU Commission released feedbacks from the public on the Fair Taxation of The Digital Economy consultation during October 26, 2017 to January 3, 2018. The public consultation received 446 replies and 121 position papers to further explain views of the repliers. The outcome of the consultation is supposed to give some reference to the EU regarding its proposal on digital economy tax in this March.
The consulting questionnaire gave possible solutions to the digital economy tax, including temporary solutions and long-term frameworks. Over half of the repliers (53.59%) believes that a targeted, provisional resort must be relied on in shorter term. The “Tax on revenues from certain digital services” proposal wins most popularity, followed by the proposals of “Tax on revenues from digital activities” and “Withholding tax on certain types of digital transactions”. The “Digital transaction tax” receives the least support. Most repliers accept the temporary solutions provided by the Commission, with a limited group of repliers (19.05%) finding the demand to propose other approaches.
The proposal provides five long-term solutions in total, with the “Digital presence in the EU” proposal gaining most favourability. The “Destination-based corporate tax” proposal receives second high approval rate, followed by the “Unitary tax” proposal and “Modify the Common Consolidated Corporate Tax Base” proposal. The “Residence tax base with destination tax rate” is least accepted, and few repliers specify their own proposal. As regards whether Small and Medium Enterprises (SMEs) be exempt from a possible digital tax, supporters and protesters are half-half.
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):