EU Communication on the Taxation of Digital Economy Firms Uses ZEW-Findings

As a means of addressing the lack of global progress towards the appropriate taxation of profits made by companies in the digital economy, the EU Commission recently proposed a number of possible measures to tax these companies more fairly in the Communication entitled “A Fair and Efficient Tax System in the European Union for the Digital Single Market“.

The Communication published by the Commission cites findings from a number of ZEW studies including the “Steuerlicher Digitaliserungsindex 2017” which recorded vast differences between how digital and more traditional business models are taxed, with digital models at a clear advantage. A further ZEW study cited by the Commission was “The Impact of Tax Planning on Forward-Looking Effective Tax Rates” which examined the potential ways in which firms can use aggressive tax planning to minimize the effect of government tax measures or to avoid them altogether.

Heavily involved in both of these studies were researchers in the ZEW Research Department “Corporate Taxation and Public Finance” as part of a team led by ZEW research associate Prof. Christoph Spengel. Spengel’s team is also frequently called on by the EU Commission to conduct investigations into international differences in the effective corporate tax burden using the European Tax Analyzer developed by ZEW together with the University of Mannheim.

For further information please contact

Prof. Dr. Christoph Spengel, Phone +49 (0)621/181-1704, E-Mail spengel@uni-mannheim.de