There is no rule in the European Union requiring multinational companies operating in the digital economy to pay tax in the countries in which they operate. This lack of legislation hampers the effective fight against tax evasion in the area of on-line sales, with negative consequences for consumer confidence and the development of e-commerce.
The introduction of a tax on the transactions of multinationals which – while not being based on European soil – issue invoices in the EU would create favourable conditions for the development of equitable e-commerce. It is therefore opportune to introduce a European ‘digital tax’ with the aim of reducing profit-shifting and tax evasion in the digital economy, and to tax the income earned in the EU by multinationals operating in this sector and boasting significant turnover in the Member States.
This tax should not be imposed on all companies trading on-line, only those that generate significant turnover in the EU from on-line sales.
Individual initiatives on the part of the Member States can serve to exacerbate the fragmentation of the digital market, demonstrating the need for action at Union level.