Digital taxation

Commission intent on fair and effective taxation of the digital economy

On 3 January 2018, ALFI responded to the public consultation on fair taxation of the digital economy issued by the European Commission in October 2017.

The objective of the Commission’s initiative was to define an approach to a fairer and more effective taxation of the digital economy.

Current corporate tax rules were conceived for traditional businesses and are based on the principle of taxing profits where value is created. They fail to capture the global reach of digital activities, where physical presence is no longer a requirement in order to supply digital services. In recognition of these shortcomings, the Commission’s digital tax package presented on 21 March 2018 proposes both an EU-wide, long-term solution for taxing the digital economy and an interim solution targeting the most urgent gaps and loopholes in the taxation of digital activities.

ALFI will continue its monitoring of the discussions held at EU and OECD level in this respect.

Vilma Domenicucci
Senior Tax Advisor, ALFI