8 Amendments of Wolf KLINZ related to 2018/0073(CNS)
Amendment 31 #
Draft legislative resolution
Paragraph 1
Paragraph 1
1. ApproveRejects the Commission proposal as amended;
Amendment 33 #
Draft legislative resolution
Paragraph 3 a (new)
Paragraph 3 a (new)
Amendment 34 #
Draft legislative resolution
Paragraph 3 b (new)
Paragraph 3 b (new)
3b. Recalls that the Commission’s claim that traditional companies pay an average of 23% of taxes while digital companies only around 10% of taxes is not based on real observed data, but rather on a ZEW-simulation from 2016 which considers a “hypothetical investment project” (ZEW 2016; p. 9). Notably, the lead author of the study has distanced himself from the Commission’s proposal. Similarly, a recent study by Copenhagen Economics (p. 6) outlines that, for example, “[i]n Germany, a digital company faces a higher effective tax rate of 25% against 21% for a traditional company. In the absence of accelerated R&D depreciation allowances it would have been 30%.” Several studies point to the fact that the challenges in international taxation, e.g. profit shifting and tax avoidance practices, which indeed can distort competition, prevail for all types of companies and business models, irrespective of whether they are digital, less digital or non-digital.
Amendment 35 #
Draft legislative resolution
Paragraph 3 c (new)
Paragraph 3 c (new)
3c. Recalls that even if the underlying justification for the DST could be substantiated by real-world observations, the proposal would still be fundamentally problematic: 1) the contribution that users of digital interfaces make to value creation can hardly be determined on the basis of objective criteria; 2) the value of a service is determined only by the coincidence of supply and demand; 3) producers of traditional goods, particularly SMEs, can also sell their products in other countries without being substantially physically present. Therefore, the principle that the place of taxation must correspond to the place of value added justifies any arbitrary tax intervention and is likely to evoke significant retaliatory measures by foreign governments. Retaliatory measures, e.g. import tariffs and destination-based taxes, will impact on EU exporters’ competitiveness in export markets and negatively impact on EU Member States’ public budgets.
Amendment 36 #
Draft legislative resolution
Paragraph 3 d (new)
Paragraph 3 d (new)
3d. Recalls that the assumption underlying the Commission proposal is that companies in the digital space do not pay their share of taxes, or they want to see companies that engage in aggressive tax practices to be taxed appropriately. The introduction of a digital tax will not prevent any company from paying their taxes on profits where it is most lucrative for them. Introducing the DST does not at all close gaps in the present tax regime, nor does it shut down tax havens. At the same time, a DST could lead to new tax avoidance strategies, whereby companies above the minimum threshold could separate or downsize their components. Accordingly, the digital services tax would not at all level the playing field for digital, less digital or non-digital corporations.
Amendment 37 #
Draft legislative resolution
Paragraph 3 e (new)
Paragraph 3 e (new)
3e. Recalls that the OECD’s digital economy group has concluded after a two-year period of studying the topic that it was impossible to ring-fence the “digital economy” considering that digitalisation has permeated nearly all industries and sectors: “[b]ecause the digital economy is increasingly becoming the economy itself, it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes.” (OECD 2015; p.11) Ring-fencing would require strong political value judgements about the legitimacy of certain business models and might open the door for increased state interventionism in Europe’s economies. It would also stand in conflict with the Treaty of Lisbon, stating that the Union “shall promote scientific and technological advance.” (Article3).
Amendment 38 #
Draft legislative resolution
Paragraph 3 f (new)
Paragraph 3 f (new)
3f. Recalls that the Commission assumes that the digitised companies concerned will largely cover the costs. This is not supported by empirical research on the price effects of comparable tax increases – for both taxes on corporate profit and taxes on corporate sales. As concerns the Commission’s proposal to tax corporate revenues, companies that make losses or operate on low margins will have no choice but to pass on the costs.
Amendment 39 #
Draft legislative resolution
Paragraph 3 g (new)
Paragraph 3 g (new)
3g. Recalls that work is currently ongoing at the OECD to find a solution to taxing the digital economy that is in line with OECD principles and international law and can be agreed to by the G20. Supports a global solution awaiting the OECD proposal. Requests that the Commission presents a proposal to Parliament based on the OECD's proposal for a global solution.