Europe to Set Digital Economy Tax at 3% of Turnover

Yesterday, 21 March 2018, the European Commission published its long-awaited draft directive for a 'digital services tax' on the revenues of multinational companies in the so-called digital economy, defined as businesses in which customers make a significant contribution to creating value.

The Commission proposes an interim 3 per cent turnover tax, ultimately to be replaced by a system in which Member States can tax profits generated by digital service users in their territory, even if a company does not have a physical presence there.