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MNI BRUSSELS WATCH: Ecofin To Discuss Taxation Of Digital Econ

MNI (London)
--Discussion Paper Says Current Rules Are 'Outdated'
--Estonia Wants Common EU Position By December
By Jean Comte
     BRUSSELS (MNI) - European Union finance ministers will tackle 'corporate
taxation challenges in the digital economy', during a discussion at an informal
meeting in Tallinn, Estonia, next week, Market News understands.
     The discussion paper, obtained by MNI, states that international rules on
taxation are 'outdated' and 'cannot cope with the challenges of the
digitalisation of the economy'.
     The fact that business can only be taxed where they have a 'physical
presence' is creating massive distortions, it adds.
     'The scale of the described market distortion is growing rapidly since the
share of the digital economy in the global economy is expected to grow
exponentially. It is urgent to close the gap in international tax rules,' the
paper concludes.
     Discussions at Tallinn's September Ecofin are only intended as a starting
point, but current EUCO presidency holders Estonia wants talks to continue until
December, when they hope to find agreement on a common way forward.
     The legislative path is vague at best at this point. EU law, which already
contains several tax-related texts, could be a good basis -- for example,
through the project of a Common Corporate Tax Base under scrutiny.
     But given the size of the issue, action could be more relevant at an
international level. In particular, the Organisation for Economic Cooperation
and Development, who led the fight against fiscal avoidance in recent years,
could be an ideal place to continue work on digital taxation.
--MNI Brussels Bureau; +44 203-865-3851; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
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MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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