Past Event

Corporate taxation in the digital era

How can we address digital taxation in the EU? Is the proposed "equalisation tax" on turnover the best policy to tackle the challenges posed by digital taxation?

Date: January 24, 2018, 12:30 pm Topic: European Macroeconomics & Governance

video & audio recordings


Event materials

Presentation by Johannes Becker

Presentation by Dmitri Jegorov

summary

The society has made substantial leaps in progress and the emergence of the digital era is a perfect illustration. Along with the wide range of benefits of digital economy, we faced certain obstacles in the area of corporate taxation among others. Issue of digital is an unresolved and increasingly urgent one, but It is not digitalization that is a problem and the launch of the Digital Single Market is of the highest importance. Fair and sustainable base for taxation is needed, which poses certain risks for the future and serves as the main motivation for rethinking what has happened. The new challenges arise from the difference between physical and economic activities (commercial) presence, which makes the situation cumbersome and go beyond BEPS.

The basic corporate taxation principle, which is about profits being taxed where the value has been created, is being challenged with the rise of digital era. In practice, there is a substantial divergence between where profits are made and where they are taxed, underlining the difference between the residence versus source. Overall, consensus on the four following features, that corporate taxation should possess was achieved. The corporate taxation principles should:
1) facilitate fairness,
2) help to reach sustainable revenue in the long term,
3) foster competition in the market and
4) safeguard single market.

Similarly, while one can follow rather pragmatic approach (keeping source and residence countries happy in the long term and ensuring that tax havens are out of the game) or normative one with the guiding principle of value creation (excluding pure imports and redefining auxiliary services as core activities), solutions to the challenges imposed must contain the following characteristics:
1) Solution should be international, which means that it must be globally applicable and the European Commission work with OECD is about to make some proposals on this issue. Openness and cooperation are critical components to achieve the stated objective and monitoring, discussions and communication at various levels should continue.
2) Clearly, there is a need for structural a solution, but immediate targeted measures are in a high demand as well.

Notes by Yana Myachenkova, Research Assistant, Bruegel

 

Schedule

Jan 24, 2018

12:30-13:00

Check-in and lunch

13:00-13:05

Welcoming speech

Maria Demertzis, Deputy Director

13:05-13:20

Speech

Stephen Quest, Director General, European Commission, DG Taxation and Customs Union

13:20-14:00

Panel discussion

Chair: Georgios Petropoulos, Research Fellow

Johannes Becker, Professor and Director of Institute of Public Economics, University of Muenster

Dmitri Jegorov, Deputy Secretary-General for Tax and Customs Policy, Ministry of Finance, Estonia

Stephen Quest, Director General, European Commission, DG Taxation and Customs Union

Stef van Weeghel, Global Tax Policy Leader at PwC, Professor of International Tax Law, University of Amsterdam

14:00-14:30

Q&A

14:30

End

Speakers

Johannes Becker

Professor and Director of Institute of Public Economics, University of Muenster

Dmitri Jegorov

Deputy Secretary-General for Tax and Customs Policy, Ministry of Finance, Estonia

Maria Demertzis

Deputy Director

Stephen Quest

Director General, European Commission, DG Taxation and Customs Union

Stef van Weeghel

Global Tax Policy Leader at PwC, Professor of International Tax Law, University of Amsterdam

Georgios Petropoulos

Research Fellow

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read about event More on this topic

Upcoming Event

Apr
23
08:30

Challenges and opportunities for the EU digital single market

At this event, we will look into the progress made towards achieving the main priorities for strengthening the digital single market, the opportunities and the challenges at EU level.

Speakers: Andrus Ansip, George Christou, Jakub Boratyński, Christian Borggreen, Adina Claici, Maria Demertzis, Roland Doll, Lie Junius, Thomas Kramler, Patrick Legros, J. Scott Marcus, David Martin Ruiz, Eva Maydell, Georgios Petropoulos, Siada El Ramly, Oliver Roethig, Aidan Ryan, André Sapir, Mark Smitham, Maximilian Strotmann, Reinhilde Veugelers, Guntram B. Wolff and Andrew W. Wyckoff Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

State aid and tax rulings: Clarifying the European Commission's approach

State aid is considered illegal under EU law. However, more clarity over the main characteristics of tax measures that can constitute state aid is needed when we look at the way the European Commission is dealing with specific cases.

By: Georgios Petropoulos Topic: Innovation & Competition Policy Date: April 12, 2018
Read article Download PDF More on this topic More by this author

Policy Contribution

Are European firms falling behind in the global corporate research race?

The author looks at how concentrated corporate R&D is in Europe, compared with sales and employment. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. How is the EU coping with technology shifts and creating the next generation of new leading firms?

By: Reinhilde Veugelers Topic: Innovation & Competition Policy Date: April 12, 2018
Read article More on this topic More by this author

Opinion

Will U.S. tax reform lure U.S. companies away from China?

What will be the results of the changes to the U.S. tax system in China? Will the new U.S. corporate tax rate cause Chinese firms to shift their operations to the U.S. to enjoy the new tax benefits? Read Alicia García-Herrero's opinion on President Donald Trump’s tax reform.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: March 26, 2018
Read about event More on this topic

Past Event

Past Event

Bank assets and business models: addressing complexity

At this event, we discussed the lack of transparency and problems in valuing correctly significant parts bank assets in the euro area based on an extensive study by the Bank of Italy.

Speakers: Simon Ainsworth, Paolo Angelini, Josina Kamerling, Martin Merlin, Alexander Lehmann and Nicolas Véron Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 21, 2018
Read article More on this topic

Blog Post

Still on the road? Assessing Trump’s threat to European cars

Just how exposed is Europe’s automotive sector to a potential escalation in the EU-US trade war?

By: Gustav Fredriksson, Alexander Roth and Simone Tagliapietra Topic: Global Economics & Governance Date: March 13, 2018
Read about event More on this topic

Past Event

Past Event

The future of the EU budget: MFF post-2020

Which should be the priorities for the Multiannual Fiscal Framework post 2020?

Speakers: Roger Havenith, Günther H. Oettinger, Charlotte Ruhe, Margit Schratzenstaller-Altzinger and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 7, 2018
Read about event

Past Event

Past Event

(How) could European safe assets be constructed?

At this event we looked at the ESRB task force’s investigation on safe assets.

Speakers: Levin Holle, Sam Langfield, Anne A. Leclercq and Guntram B. Wolff Topic: European Macroeconomics & Governance, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 1, 2018
Read about event More on this topic

Past Event

Past Event

Bruegel - Financial Times Forum: The future of euro-area governance

The third event in the Bruegel - Financial Times Forum series looked into the future of euro-area governance.

Speakers: Maria Demertzis, Gideon Rachman, Manfred Weber and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 27, 2018
Read about event More on this topic

Past Event

Past Event

Is there life After TTIP? The future of transatlantic economic relations

The partnership between North America and Europe is becoming unsettled and uncertain. How can we deal with this new situation that threatens the prosperity and ultimately the position of North America and Europe in the global economy.

Speakers: Maria Demertzis, Daniel S. Hamilton, Luisa Santos and André Sapir Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 19, 2018
Read article More on this topic More by this author

Opinion

US tax reform and implications for the German coalition agreement

Major recent reform of US tax laws represents a serious challenge to Germany, highlighting several weaknesses in the country's economy. The formation of Germany's coalition government represents an opportunity to discuss its own tax changes, which could remedy current problems and stimulate a sustainable domestic boom.

By: Guntram B. Wolff Topic: Global Economics & Governance Date: February 7, 2018
Read about event More on this topic

Past Event

Past Event

The implications of Blockchain platforms

The disruptive forces of block chain technologies in markets and industries: a European perspective

Speakers: Anna Dimitrova, Julio Faura, Georgios Petropoulos, Johan Pouwelse and Pēteris Zilgalvis Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 6, 2018
Load more posts