EU seeks 'joint approach' on digital tax

Tapping more revenues from big online companies, such as Amazon and Facebook, is the thrust of an EU drive – as multinationals stand accused of paying too little tax in Europe, by routing most of their profits to low-rate countries such as Luxembourg.

The European Commission wants a fairer playing field, but there are differing views and scepticism in the bloc.

“It would be much better to have a joint European approach to this issue, how to effectively tax the digitailsed economy, so that we don’t have a patchwork of unilateral member state solutions, which undermine the integrity of the single market,” said Valdis Dombrovskis, European Commission Vice-President.

Brick-and-mortar firms are said to pay more than twice the taxes of their digital competitors.

The Commission wants to seal a compromise on the global stage, to see off concerns the EU will be less competitive if it does its own thing.

“It’s important that the EU reaches a consensus on the way forward befoee we start exploring other avenues like enhanced cooperation,” added Dombrovskis.

To get the ball rolling, short-term solutions could be brought in – including an “equalisation” tax on turnover – proposed by France and backed by 10 EU countries.