EU's new 3% sales tax on digital companies

gleeful

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So the EU is proposing a new sales tax (on top of VAT and corporation tax) on 'digital companies' (a term as yet undefined).

It is targeting the likes of Google and Facebook, but will also gather up a lot of small companies in its net. 3% doesn't sound like a lot - but for a lot of small companies, the cost of form filling caused by this will be a lot more than 3%.

Let me explain with my own company. We sell software and services around the EU and elsewhere. Are we a digital company? Maybe. Maybe we are for the service side of our business.

We sell in around 15 EU states. Do we have to register for this new sales tax in each one? Do we now have to fill in 15 new tax returns? Let say a customer in a new state wants to buy something worth €100. Clearly thats not worth the effort of selling to them, and learning a new tax system, and filing the correct form, all for the sake of paying €3 in tax. The cost in time and effort will be much higher than €3, and probably higher than the sale itself.

Yet - another new EU law which is in the works will make it illegal for us to refuse to sell to that new customer, under the principle of the single digital market.

This could well turn out to be a serious headache for small businesses.
 


CatullusV

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So the EU is proposing a new sales tax (on top of VAT and corporation tax) on 'digital companies' (a term as yet undefined).

It is targeting the likes of Google and Facebook, but will also gather up a lot of small companies in its net. 3% doesn't sound like a lot - but for a lot of small companies, the cost of form filling caused by this will be a lot more than 3%.

Let me explain with my own company. We sell software and services around the EU and elsewhere. Are we a digital company? Maybe. Maybe we are for the service side of our business.

We sell in around 15 EU states. Do we have to register for this new sales tax in each one? Do we now have to fill in 15 new tax returns? Let say a customer in a new state wants to buy something worth €100. Clearly thats not worth the effort of selling to them, and learning a new tax system, and filing the correct form, all for the sake of paying €3 in tax. The cost in time and effort will be much higher than €3, and probably higher than the sale itself.

Yet - another new EU law which is in the works will make it illegal for us to refuse to sell to that new customer, under the principle of the single digital market.

This could well turn out to be a serious headache for small businesses.
Link?
 

gleeful

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Logically, the EU itself should collect this tax. One tax return, instead of 27. I believe that is part of the 'interim' proposal, but it would be devolved to the states after... or something. The detail is lacking.
 

flavirostris

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They have to plug the hole in the EU budget somehow. The UK was contributing something like 12 billion per annum.
 

stopdoingstuff

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Logically, the EU itself should collect this tax. One tax return, instead of 27. I believe that is part of the 'interim' proposal, but it would be devolved to the states after... or something. The detail is lacking.
Giving the EU direct taxation powers is not wise at all.
 

flavirostris

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gleeful

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They have to plug the hole in the EU budget somehow. The UK was contributing something like 12 billion per annum.
Luckily the UK has rolled over without even having its tummy tickled. It will play the 12+ billion.
 

gleeful

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Giving the EU direct taxation powers is not wise at all.
To be honest, I would support the theory of the EU handling corporation tax. In the US, corporation tax is a federal tax. However - I object to pointless repeating paperwork.

Irish style tax at an EU level: yes.

French style anything (except food): no.
 

flavirostris

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Exactly why ideas like this tax are being banded around
Obviously the EU are not going to spend less on bureaucracy, so the remaining member states will have to pay one way or another.

Leo even said he was willing to contribute more to the EU budget.

Thanks Leo. There's nothing I enjoy more than having my tax money disappearing into an unaccountable black hole in Brussels.
 

gleeful

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Obviously the EU are not going to spend less on bureaucracy, so the remaining member states will have to pay one way or another.

Leo even said he was willing to contribute more to the EU budget.

Thanks Leo. There's nothing I enjoy more than having my tax money disappearing into an unaccountable black hole in Brussels.
The EU's bureaucracy is the leanest in Europe. The nation state's civil service is far, far more wasteful.
 

wombat

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Thanks Leo. There's nothing I enjoy more than having my tax money disappearing into an unaccountable black hole in Brussels.
As distinct from vanishing into a boghole in Offaly.:lol:
 

flavirostris

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As distinct from vanishing into a boghole in Offaly.:lol:
The difference being that we can at least vote out the politicians here for wasting money down a boghole in Offaly. How do we vote out the unaccountable elite in Brussels for wasting money ?
 


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