The European Commission proposes new rules for digital platforms to be applied in 2023 in an effort to tackle tax evasion and boost progress made on tax transparency
The EU has reached an agreement on new tax rules extended to digital platforms. The new tax transparency rules will make sure those who are making money online, through trading goods or services, pay their fair share of tax.
An agreed proposal will ensure Member States automatically exchange information on the revenues generated by sellers on digital platforms whether located in the EU or not.
National authorities will now be able to identify situations where tax should be paid, whilst reducing the administration burden placed on platforms dealing with several different reporting jurisdictions.
Commissioner for the Economy, Paolo Gentiloni said, “Once the new rules discussed today are adopted and implemented, national authorities will automatically exchange information on the revenues generated by sellers on these platforms, and those sellers will benefit from simpler administrative procedures. This is good news for the public purse and good news for honest entrepreneurs”.
Proposals for an EU compliance framework were made by the commission in July to promote greater cooperation, trust and transparency amongst tax administrators.
The initiative was proposed to prevent dialogue between tax administrations for the common resolution of cross-border tax issues in the area of corporate income tax.
However, alternative payment and digital investments such as crypto assets and e- money which threatened to undermine progress made on tax transparency, pose substantial risks for tax evasion.
The commission published a roadmap in December 2020 outlining plans to extend the scope of the directive to both crypto assets and e-money in a new DAC8 which has yet to be published.