Tax on digital transactions: Discussions or a stalemate with the European Union?

India not alone in levying tax on digital transactions. With talks at the OECD on a global deal making little headway, a number of countries have made their intent clear on imposing taxes on such transaction. Gulveen Aulakh examines the digital tax landscape in detail...

AUSTRIA
Revenues from advertising services on digital media rendered in Austria


FRANCE
Portion of taxable services income after application of “French digital presence”

GREECE
Income from short-term rentals in the sharing economy through digital platforms

UK
Revenue over 25 million pounds from UK users from social media platforms, internet search engine and online market place

VIETNAM
Income derived by nonresidents from digital and e-commerce operations in Vietnam

HUNGARY
Gross amount of online advertising payments

INDONESIA
E-commerce sales, when the digital PE cannot be applied due to the provision of a Tax Treaty

ITALY
Gross revenue from digital advertising, e-commerce or marketplace sales, transmission of user data

DISCUSSIONS

• OECD holding talks with 140 countries
• Efforts to thrash out rules to tax tech cos
• Failure of talks could trigger unilateral taxes
• Rules under Base erosion and profit shifting (BEPS) framework

STALEMATE

• US pulled out of OECD talks
• India has levied EL (Equalisation Levy) on digital transactions
• Both term OECD talks inconclusive
• EU and Asian countries imposing/proposing DST
• US initaited probe, to see if levies discriminate against US cos