Why Global Taxation is Needed for the Success of the Digital Age

The European Commission’s proposal to create an EU digital services tax is aimed mainly at multinational tech giants. But should the tax take effect, it will be Europe’s own startups and digital ecosystems that pay the highest price.

This is the view of Gillian Tans, CEO of Booking.com, who makes her case against EU’s digital services tax (DST), in a piece originally published on Project Syndicate.

In March 2018, the European Commission submitted a proposal to create an EU digital services tax (DST) aimed at multinational tech giants that impact Europe’s startups and digital ecosystems. The proposed DST becomes unsustainable as industries become digitized and will erode the benefits and opportunities that the digital economy offers companies and consumers. The global economy is increasingly digitized, and new tax measures that specifically target the digital sector could be damaging to growth, argues Tans, who offers the following recommendations for taxation.

Recommendations:

1. A fair, supportive corporate tax system to safeguard growth when economic conditions are challenging.
2. Business taxation must continue to be based fundamentally on realized income.
3. A global consensus regarding the development of a uniform taxation framework is essential.