A single European tax on digital services to hit US tech giants

Transforming the (few) existing national digital taxes into a single European anti-avoidance regulation, or alternatively working on a new'digital excise tax' valid throughout the Union. While waiting for the presentation of this second proposal - which is bound to arrive in Brussels soon - interest groups and the professional and academic world are studying a range of retaliation on Trump's most exposed nerve towards Europe: the taxation of the large oligopolists of the digital economy.

There are two starting points for the - at the moment theoretical - offensive on the Atlantic front. The first is to capitalise on the experience of countries that, like Italy, France and the United Kingdom, had already challenged the Trump 1 on the issue at the end of the last decade, launching national Digital Services Tax with a strong common imprinting (the OECD's Pillar 2): global turnover thresholds (EUR 750 million/year) and rate on turnover (from 2 to 6 per cent). Now, however, even in the face of low revenue - and geographical fragmentation - a common and effective initiative is being considered.

"The idea of a Dst on an EU basis is appropriate,' says Giuseppe Marino, Professor of Taxation at the State University of Milan, lawyer and chartered accountant, 'but even more fascinating is the proposal of a digital excise tax that replicates the 'physical' one on mining extractions: after all, the principle is the same, extracting wealth from a territory with a tax withheld at source. According to Marino, the objective to be pursued, regardless of the legal instrument, is the same, to intercept through taxation the value transferred to big-tech. "Among other things," the Milanese professor concludes, "the excise tax is already a harmonised tax and therefore already within the Commission's reach.

Agreeing in principle but more cautious on the practical side is Carlo Romano, vice-president of the tax lawyers of Rome, Phd at Luiss and Groningen. 'Conceptually the idea of digital excise may be correct,' Romano says, 'the problem in practice, however, is the valorisation of the digital data, i.e. being able to identify the economic value of the data produced by the EU user within the EU perimeter in favour of the platform. Although the idea is fascinating, adds the practitioner, 'its concrete realisation is not trivial, it would require sharing by all the member states and above all a consensus on how to value the data, essentially a recognised unit of measurement'.

As for the use, for the purpose, of market parameters in relation to profiled data for advertising purposes, 'I wouldn't know how much these,' Romano concludes, 'can be considered to express an economic value. The tribute is functional to hit a manifestation of economic capacity. The real issue is what kind of valorisation to adopt'.