During its meeting of November 6, 2018 the Economic and Financial Affairs Council (ECOFIN) held a policy debate on the European Commission’s proposal to establish a digital services tax. The discussion focused on two key issues in the Commission’s proposal:
· The scope of taxable services; and
· The question of the expiry of the directive (the so-called "sunset clause”).
According to a press release issued by ECOFIN, on the sunset clause all member states agree that the directive should expire once there is a comprehensive solution to taxing digital economy at OECD level.
While the proposal has been thoroughly discussed at technical level and progress has been achieved on a number of issues such as definitions, tax collection, and administrative cooperation, there are still differences between member states on several issues, including the precise scope of services which would be subject to the future tax.
The Presidency concluded that there will be further work at technical level in order to be able to reach an agreement at the ECOFIN meeting of December 4, 2018.
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