46 Amendments of Eva JOLY related to 2018/0073(CNS)
Amendment 40 #
Proposal for a directive
Recital 1
Recital 1
(1) The global economy is rapidly becoming digital and, as a result, new ways of doing business have emerged. Digital companies are characterised by the fact that their operations are strongly linked to the internet. In particular, digital business models rely to a large extent on the ability to conduct activities remotely and with limited or no physical presenceor taxable presence in a given country, on the contribution of end-users to value creation, and on the importance of intangible assets.
Amendment 41 #
Proposal for a directive
Recital 2
Recital 2
(2) The current corporate taxation rules were mainly developed during the 20th century for traditional businesses. They are based on the idea that taxation should take place where value is created. However, the application of the current rules to the digital economy has led to a misalignment between the place where profits are taxed and the place where value is created, notably in the case of business models heavily reliant on user participation. Digitalisation has changed the role of users, allowing them to become increasingly involved in the value creation process. It has therefore become evident that the current corporate tax rules for taxing the profits of the digital economy are inadequate andnot taking this new factor into account and urgently need to be reviewed.
Amendment 42 #
Proposal for a directive
Recital 2 a (new)
Recital 2 a (new)
(2a) The objective is to close the gap between taxation of digital revenues and traditional revenues. Currently, on average, digital businesses face an effective tax rate of only 9.5%, compared to 23.2% for traditional business models1a. A taxation system must be fair and beneficial to society as a whole. There should be a level playing field for all companies operating in the Single Market. _________________ 1a Source: Computations from the Impact Assessment of the European Commission, based on ZEW (2016, 2017) and ZEW et al.(2017).
Amendment 64 #
Proposal for a directive
Recital 6 a (new)
Recital 6 a (new)
(6a) If this proposal for an interim solution does not result in an agreement and therefore fails to eliminate the risks of fragmentation of the Single Market and of distortion of competition, the European Commission should issue a new proposal based on Article 116 of the Treaty on the Functioning of the European Union, whereby the European Parliament and the Council act in accordance with the ordinary legislative procedure to issue the necessary directives. This is essential to come to an agreement without delay in order to tackle this issue and to avoid the multiplication of unilateral national digital taxes by Member States. If necessary, a change of legal basis should therefore be envisaged.
Amendment 66 #
Proposal for a directive
Recital 7
Recital 7
(7) That interim solution should establish the common system of a digital services tax ('DST') on revenues resulting from the supply of certain digital services by certain entities, whether or not these are freely accessible or paid digital services and online content. It should be an easy- to- implement measure targeting the revenues stemming from the supply of digital services where users contribute significantly to the process of value creation. Such factor (user value creation) also underpins the action with respect to corporate tax rules, as described in recital (5). On digital interfaces, it is very difficult to distinguish between a customer and a user, since both contribute significantly to the process of value creation in most cases. The term ‘user’ in this Directive is therefore referring to both consumers and users of digital services and online content.
Amendment 74 #
Proposal for a directive
Recital 9
Recital 9
(9) DST should be applied to revenues resulting from the provision of certain digital services only. The digital services should be ones that are largely reliant on user value creation whereand on their ability to deliver services with no or a very limited physical presence. In such cases, the difference between the place where the profits are taxed and the place where the users are established is typically greatest allowing for decoupling market presence and physical presence in many sectors of the economy. It is the revenues obtained from the processing of user input that should be taxed, not the user participation in itself.
Amendment 75 #
Proposal for a directive
Recital 10
Recital 10
(10) In particular, taxable revenues should be those resulting from the provision of the following digital services: (i) the placing on a digital interface of advertising targeted at users of that interface; (ii) the making available of multi-sided digital interfaces which allow users to find other users and to interact with them, and which may also facilitate the provision of underlying supplies of goods or services directly between users (sometimes referred to as "intermediation" services); and (iii) the exploitation, transmission and sale of data collected about users and generated from such users' activities on digital interfaces; (iv) the supply of online content such as video or audio via digital interfaces; and (v) the sale of goods and services on digital interfaces. If no revenues are obtained from the supply of such content, goods and services, there should be no DST liability. Other revenues obtained by the entity providing such services but not directly stemming from such supplies should also fall outside the scope of the tax.
Amendment 79 #
Proposal for a directive
Recital 12
Recital 12
(12) Services provided by multi-sided digital interfaces should be defined by reference to their capacity to enable users to find other users and to interact with them. The differential aspect of multi-sided digital interfaces is that they allow a user interaction which could not take place without the interface matching users with each other (in other words, the interface allows users to get in touch with other users). Some services typically referred to as communication or payment services, such as instant messaging services, e-mail services or e-payment services, may also be seen as facilitating the interaction between users through a digital interface, but users cannot usually get in touch with each other unless they have already established contact by other means. The revenues resulting from the supply of communication or payment services should therefore remain outside the scope of the tax because such suppliers do not operate as a marketplace, but rather produce support software or other information technology instruments allowing customers to reach out to other persons with whom they already have a relationship in most cases. However, if these services, such as e-mail services, are creating further value thanks to the exploitation, transmission or sale of users’ data, these revenues should fall within the scope of DST.
Amendment 81 #
Proposal for a directive
Recital 13
Recital 13
(13) For cases involvingThe revenues obtained from online transactions made through multi-sided digital interfaces that facilitate an underlying supply of goods or services directly between users of the interface, the underlying transactions and the revenues obtained by users from those transactions should remain outside should fall within the scope of the taxDST. The revenues resulting from retail activities consisting in the sale of goods or services which are contracted online via the website of the supplier of such goods or services, and where the supplier does not act as an intermediary, should also be outsidefall within the scope of DST because the value creation for the retailer lies with the goods or services provided and the digital interface is only used as a means of communication. Whether a supplier is selling goods or services online on his own account or providing intermediation services would be determined by taking into account the legal and economic substance of a transaction, as reflected in the arrangements between the relevant parties. For instance, a supplier of a digital interface where third-party goods are made available could be said to provide an intermediation service (in other words, the making available of a multi-sided digital interface) where no significant inventory risks are assumed, or where it is the third party effectively setting the price of such goodsprocessing and exploitation of data on such transactions creates further value and because the absence of physical presence may create opportunities for tax avoidance.
Amendment 86 #
Proposal for a directive
Recital 14
Recital 14
(14) Services consisting in the supply of digital content by an entity through a digital interface should be exincluded fromin the scope of the tax, regardless of whether the digital content is owned by that entity or that entity has acquired the rights to distribute it. EGiven that there ifs some sort of interaction between the recipients of such digital content may be allowed and therefore the supplier of such services could be seen as making available a multi-sided digital interfaceand the supplier of such services, it is less clear that the user plays astill significantly ceontral role inibute to the creation of further value for the company supplying the digital content. Instead, the focus from the perspective of value creation is on the digital content itself which is supplied by the entity, in particular thanks to the exploitation and processing of users’ data. Therefore, the revenues obtained from such supplies should fall outsidewithin the scope of the tax, also because the absence of physical presence may create opportunities for tax avoidance.
Amendment 91 #
Proposal for a directive
Recital 16
Recital 16
(16) The service described in recital (14) shcould be distinguished from a service consisting in the making available of a multi-sided digital interface through which users can upload and share digital content with other users, or the making available of an interface that facilitates an underlying supply of digital content directly between users. These latter services constitute a service of intermediation and should therefore also fall within the scope of DST, regardless of the nature of the underlying transaction.
Amendment 92 #
Proposal for a directive
Recital 17
Recital 17
(17) Taxable services consisting in the exploitation, transmission or sale of data collected about users should cover only data which has been generated from such users' activities in digital interfaces, but not data which has been generated from sensors or other means and collected digitally. This is because the services within the scope of DST should be those using digital interfaces as a way to create user input which they monetise, rather than services using interfaces only as a way to transmit data generated otherwise. DST should therefore. These taxable services should be those using digital interfaces as a way to create user input which they monetise. DST is not be a tax on the collection of data, or the use of data collected by a business for the internal purposes of that business, or the sharing of data collected by a business with other parties for no consideration. What DST should as such. Instead, it target is the generation of revenues from the processing, exploitation, transmission or sale of data obtained from a very specific activity (users' activities on digital interfaces).
Amendment 95 #
Proposal for a directive
Recital 22
Recital 22
(22) Only certain entities should qualify as taxable persons for the purposes of DST, regardless of whether they are established in a Member State or in a non-Union jurisdiction. In particular, an entity should qualify as a taxable person only if it meets both of the following conditions: (i) the total amount of worldwide revenues reported by the entity for the latest complete financial year for which a financial statement is available exceeds EUR 750 000 000; and (ii) the total amount of taxable revenues obtained by the entity within the Union during that financial year exceeds EUR 50 000 000.
Amendment 98 #
Proposal for a directive
Recital 23
Recital 23
Amendment 100 #
Proposal for a directive
Recital 24
Recital 24
(24) The second threshold, relating to (total annual taxable revenues in the Union), should limit the application of the tax to cases where there is a significant digital footprint at Union level in relation to the type of revenues covered by DST. It should be set at Union level in order to disregard differences in market sizes which may exist within the Union. This unique threshold is intended to bring more simplicity, legal certainty and fairness. The objective is to capture companies that heavily rely on revenues generated from digital services as described above. This threshold also allows to exclude small enterprises and start-ups for which the compliance burdens of the new tax would be likely to have a disproportionate effect.
Amendment 104 #
Proposal for a directive
Recital 26
Recital 26
(26) Special rules shcould be set out for entities belonging to a consolidated group for financial accounting purposes. The revenues obtained by an entity from supplies to other entities belonging to the same group for financial accounting purposes should be excluded from the scope of the new tax. For the purposes of determining whether an entity is above the applicable thresholds and thus qualifies as a taxable person, the thresholds should be applied in respect of total consolidated group revenues.
Amendment 108 #
Proposal for a directive
Recital 32
Recital 32
(32) As regards the exploitation, sale or transmission of data collected about users, the allocation of taxable revenues in a tax period to a Member State should take into account the number of users from whom data exploited, sold or transmitted in that tax period has been generated as a result of such users having used a device in that Member State.
Amendment 110 #
Proposal for a directive
Recital 34
Recital 34
(34) Any processing of personal data carried out in the context of DST should be conducted in accordance with Regulation (EU) 2016/679 of the European Parliament and of the Council31 , including that which may be necessary in relation to Internet Protocol (IP) addresses or other means of geolocation. In particular, regard should be given to the need to provide appropriate technical and organisational measures to comply with the rules relating to the lawfulness and security of processing activities, especially with the principles of necessity and proportionality, the provision of information and the rights of data subjects. Whenever possible, personal data should be rendered anonymous. _________________ 31 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).
Amendment 114 #
Proposal for a directive
Recital 35
Recital 35
(35) The taxable revenues should be equal to the total gross revenues obtained by a taxable person, net of value added tax and other similar taxes. Taxable revenues should be recognised as obtained by a taxable person at the time when they become due, regardless of whether they have actually been paid by then. DST should be chargeable in a Member State on the proportion of taxable revenues obtained by a taxable person in a tax period that is treated as obtained in that Member State, and should be calculated by applying the DST rate to that proportion. There should be a single DST rate at Union level in order to avoid distortions in the Single Market. The DST rate should be set at 35%, which achieves an appropriate balance between revenues generated by the tax and accounting for the differential DST impact for businesses with different profit margins.
Amendment 117 #
Proposal for a directive
Recital 35 a (new)
Recital 35 a (new)
(35a) A single DST rate at Union level constitutes a first step towards further harmonisation of corporate taxation at Union level. In order to create a level playing field and to eliminate tax competition and the resulting race to the bottom as regards corporate taxation levels, a minimum effective corporate tax rate should also be introduced at Union level in the near future.
Amendment 121 #
Proposal for a directive
Recital 40 a (new)
Recital 40 a (new)
(40a) The DST is conceived as a temporary measure in order to address the current distortion of competition between digital and non-digital businesses. This situation would however be best addressed by a more comprehensive solution involving a fundamental change in corporate taxation rules at Union level. The best solution to tackle the problem of tax avoidance by digital companies and, more generally, by all companies, resides in the adoption of the Council Directive on a Common Consolidated Corporate Tax Base including the digital permanent establishment as proposed in the legislative resolution of the European Parliament of 15 March 2018 on the proposal for a Council Directive on a Common Consolidated Corporate Tax Base, together with the adoption of the Council Directive laying down rules relating to the corporate taxation of a significant digital presence. Therefore, this Directive should expire as soon as these two latter Directives enter into application.
Amendment 125 #
Proposal for a directive
Recital 40 b (new)
Recital 40 b (new)
(40b) Member States should regularly report to the Commission on the payment of the DST by entities, the functioning of the OSS and the cooperation with other Member States for tax collection and payment.
Amendment 126 #
Proposal for a directive
Recital 40 c (new)
Recital 40 c (new)
(40c) Three years after...[the date of entry into force of this Directive], the Commission should make an assessment of the application of this Directive and present a report to the European Parliament and the Council, accompanied, if appropriate, by proposals for its review. The report should assess, in particular, the entities covered by the scope of the DST (type of revenues, size, etc.), the amount of tax paid in each Member State, the functioning of the OSS and the re-allocation of DST between Member States, in addition to the potential tax planning practices that were developed by entities to avoid paying the DST.
Amendment 128 #
Proposal for a directive
Recital 41
Recital 41
(41) The objectives of this Directive aim at protecting the integrity of the Single Market, ensuring its fair and proper functioning and avoiding distortion of competition. Since those objectives, by their very nature, cannot be sufficiently achieved by Member States but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives,
Amendment 132 #
Proposal for a directive
Article 3 – paragraph 1 – point c
Article 3 – paragraph 1 – point c
(c) the transmissionexploitation, the transmission or the sale of data collected about users and generated from users' activities on digital interfaces.
Amendment 134 #
Proposal for a directive
Article 3 – paragraph 1 – point c a (new)
Article 3 – paragraph 1 – point c a (new)
(ca) the making available to users of digital content on digital interfaces;
Amendment 136 #
Proposal for a directive
Article 3 – paragraph 1 – point c b (new)
Article 3 – paragraph 1 – point c b (new)
(cb) the sale of goods and services on digital interfaces.
Amendment 137 #
Proposal for a directive
Article 3 – paragraph 4 – point a
Article 3 – paragraph 4 – point a
(a) the making available of a digital interface where the sole or main purpose of making the interface available is for the entity making it available to supply digital content to users or to supply communication services to users or to supply payment services to users, as long as no further revenues are generated thanks to the exploitation, transmission or sale of users’ data;
Amendment 141 #
Proposal for a directive
Article 3 – paragraph 7
Article 3 – paragraph 7
Amendment 142 #
1. 'Taxable person', with respect to a tax period, shall mean an entity meeting both of the following conditions:whose total amount of taxable revenues obtained within the Union during the relevant financial year exceeds EUR 50 000 000.
Amendment 145 #
Proposal for a directive
Article 4 – paragraph 1 – point a
Article 4 – paragraph 1 – point a
Amendment 146 #
Proposal for a directive
Article 4 – paragraph 1 – point b
Article 4 – paragraph 1 – point b
Amendment 148 #
Proposal for a directive
Article 4 – paragraph 4
Article 4 – paragraph 4
4. The rule in Article 5(1) shall apply in determining under paragraph 1(b) whether taxable revenues are obtained within the Union.
Amendment 149 #
Proposal for a directive
Article 4 – paragraph 6
Article 4 – paragraph 6
6. If the entity referred to in paragraph 1 belongs to a consolidated group for financial accounting purposes, that paragraph shall be applied instead to the worldwide revenues reported by, and taxable revenues obtained within the Union by, the group as a whole.
Amendment 150 #
Proposal for a directive
Article 5 – paragraph 2 – point c a (new)
Article 5 – paragraph 2 – point c a (new)
(ca) in the case of a service falling within Article 3(1)(ca), the digital content in question appears on the user's device at a time when the device is being used in that Member State in that tax period to access a digital interface;
Amendment 151 #
Proposal for a directive
Article 5 – paragraph 2 – point c b (new)
Article 5 – paragraph 2 – point c b (new)
(cb) in the case of goods and services falling within Article 3(1)(cb), the goods and services in question are delivered to users in that Member State in that tax period.
Amendment 155 #
Proposal for a directive
Article 5 – paragraph 6
Article 5 – paragraph 6
6. The data that may be collected from users for the purposes of applying this Directive shall be limited to data indicating the Member State where the users are located, without allowing for the identification of those users. Any processing of personal data carried out for the purposes of applying this Directive shall fully comply with Regulation (EU) 2016/679.
Amendment 162 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
The DST rate shall be 35%.
Amendment 166 #
Proposal for a directive
Article 13 – paragraph 2
Article 13 – paragraph 2
2. However, if the taxable person ceases to be liable to DST in that Member State of identification chosen under Article 10(3)(b), the taxable person shall change its Member State of identification in accordance with the requirements of Article 10, without prejudice to paragraph 2a.
Amendment 167 #
Proposal for a directive
Article 13 – paragraph 2 a (new)
Article 13 – paragraph 2 a (new)
2a. If the taxable person ceases to be liable to DST in the Member State of identification chosen under Article 10(3)(b), the taxable person may decide to keep the Member State of identification initially chosen, given that the taxable person may be liable to DST in that Member State again in the next tax period. If the taxable person is not liable to DST in that Member State for more than two consecutive tax periods, it shall change its Member State of identification in accordance with the requirements of Article 10.
Amendment 168 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
2. The DST return shall also show, with respect to the tax period, the total amount of worldwide revenues and total amount of taxable revenues within the Union applicable for the purposes of Article 4(1).
Amendment 169 #
2. The amendments referred to in paragraph 1 shall be submitted electronically to the Member State of identification within threewo years of the date on which the initial return was required to be submitted. Amendments after such period shall be governed by the rules and procedures applicable in each Member State respectively where DST is due.
Amendment 171 #
Proposal for a directive
Article 18 – paragraph 3
Article 18 – paragraph 3
3. Member States mayshall adopt measures to prevent tax evasion, avoidance and abuse with respect to DST.
Amendment 178 #
Proposal for a directive
Article 24 a (new)
Article 24 a (new)
Article 24a Sunset clause This Directive shall cease to apply as soon as the two following Council Directives enter into application: (a) the Council Directive laying down rules relating to the corporate taxation of a significant digital presence; and (b) the Council Directive on a Common Consolidated Corporate Tax Base including the digital permanent establishment as proposed in the legislative resolution of the European Parliament of 15 March 2018 on the proposal for a Council directive on a Common Consolidated Corporate Tax Base.
Amendment 179 #
Proposal for a directive
Article 24 b (new)
Article 24 b (new)
Article 24b Reporting obligations Member States shall report every year to the Commission relevant figures and information on the payment of the DST by entities, the functioning of the OSS and the cooperation with other Member States for tax collection and payment.
Amendment 180 #
Proposal for a directive
Article 24 c (new)
Article 24 c (new)
Article 24c Review Three years after...[the date of entry into force of this Directive], the Commission shall conduct an assessment of the application of this Directive and present a report to the European Parliament and the Council, accompanied, if appropriate, by proposals for its review. The report shall assess, in particular, the entities covered by the scope of this Directive, the amount of tax paid in each Member State and the functioning of the OSS.