The European Commission published its EU digital tax package on the taxation of the digital economy on March 21. The package contains two new draft EU Directives.
The first draft Directive on the corporate taxation of a significant digital presence represents a long-term, comprehensive solution within Member States’ corporate tax systems. It provides rules for establishing a taxable nexus for a non-physical commercial presence of a digital business (‘a significant digital presence’).
The second proposed Directive represents a targeted, short-term solution. It introduces, at the EU level, a Digital Services Tax at a rate of 3% on gross revenue (net of VAT and other similar taxes) derived in the European Union from the certain identified activities.