Digital Service Taxes

Kane Borders, Sofía Balladares Herbert, Mona Barake and Enea Baselgia

No 6, Notes from EU Tax Observatory

Abstract: Digital Service Taxes (DSTs) are a recently introduced fiscal tool designed to tax digital companies. This note collects all publicly available data to take stock of the first few years of DST implementation. Currently, twelve countries – both OECD and non-OECD – have an active DST in place. Current tax revenues from these DSTs are mostly in line with expected revenues, comparable in magnitude to estimated Pillar 1 revenues, and rising rapidly. First experiences (e.g., from the UK) suggest that DSTs can be effective at taxing digital companies that have tended to pay low corporate income tax rates in destination countries in a targeted way. However, the available data remains limited and more research needs to be done to progress towards a full cost-benefit analysis of DSTs.

Keywords: Digital service taxes; tax policy; multinational tech companies (search for similar items in EconPapers)
JEL-codes: F38 H25 H26 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2023-06
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Persistent link: https://EconPapers.repec.org/RePEc:dbp:plnote:006

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