Digital services tax: A critical analysis and comparison with the VAT system
Lamensch, M. (2019). Digital services tax: A critical analysis and comparison with the VAT system. European Taxation 59(6).
In March 2018, the European Commission tabled a proposal for the adoption of a “digital service tax” (DST) on selected revenue streams of digital giants. The objective of the DST is to compensate, in the short term, for the low level of corporate taxation of these companies in the European Union and thereby address the pressing demand for more tax fairness and justice emerging from civil society. The DST is presented as an indirect tax on turnover and is often compared to a value added tax (VAT). In this article, the author seeks to highlight the many differences that exist between the EU harmonized VAT and the proposed DST. Further, the author challenges the idea that the DST would effectively be an indirect tax and, most importantly, that it would effectively increase tax fairness in the European Union.