Proposed EU Digital Tax Could Mean Major Tax Hike for US Companies

May 10, 2018

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 three percent tax The European Commission recently proposed a 3% tax on turnover for companies with EU digital revenues over €50 million and total global revenues over €750 million.
 50 euro 750 euro


About 50% of the affected companies would be American.

 america fifty percent france ireland luxembourg netherlands graphic

This is an attempt by the EU to combat base erosion and profit shifting by digital companies that often don’t have a physical presence in many jurisdictions. Many of these companies allocate income to low-tax jurisdictions to lower their effective tax rates, making it difficult for traditional businesses to compete.

 digital sales versus physical sales

 Economic Cooperation and Development (OECD) logo The topic is expected to be discussed at length at the next 35-nation Organization for Economic Cooperation and Development (OECD) summit in June 2018. 


Learn more about the proposed EU-digital tax and more in the full Tax Policy Update from McGuireWoods Consulting. 

Radha Mohan | Lai King Lam