Legal provisions of COM(2018)148 - Common system of a digital services tax on revenues resulting from the provision of certain digital services

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dossier COM(2018)148 - Common system of a digital services tax on revenues resulting from the provision of certain digital services.
document COM(2018)148 EN
date March 21, 2018


Chapter 1

SUBJECT MATTER AND DEFINITIONS

Contents

Article 1 - Subject matter

This Directive establishes the common system of a digital services tax ('DST') on the revenues resulting from the provision of certain digital services.

Article 2 - Definitions

For the purposes of this Directive, the following definitions shall apply:

(1)'entity' means any legal person or legal arrangement that carries on business through either a company or a structure that is transparent for tax purposes;

(2)'consolidated group for financial accounting purposes' means all entities that are fully included in consolidated financial statements drawn up in accordance with the International Financial Reporting Standards or a national financial reporting system;

(3)'digital interface' means any software, including a website or a part thereof and applications, including mobile applications, accessible by users;

(4)'user' means any individual or business;

(5)'digital content' means data supplied in digital form, such as computer programmes, applications, music, videos, texts, games and any other software, other than the data represented by a digital interface;

(6)'Internet Protocol (IP) address' means a series of digits assigned to networked devices to facilitate their communication over the internet;

(7)'tax period' means a calendar year.

Article 3 - Taxable revenues

1. The revenues resulting from the provision of each of the following services by an entity shall qualify as taxable revenues for the purposes of this Directive:

(a)the placing on a digital interface of advertising targeted at users of that interface;

(b)the making available to users of a multi-sided digital interface which allows users to find other users and to interact with them, and which may also facilitate the provision of underlying supplies of goods or services directly between users;

(c)the transmission of data collected about users and generated from users' activities on digital interfaces.

2. The reference in paragraph 1 to revenues shall include total gross revenues, net of value added tax and other similar taxes.

3. Point (a) of paragraph 1 shall apply whether or not the digital interface is owned by the entity responsible for placing the advertising on it. Where the entity placing the advertising does not own the digital interface, that entity, and not the owner of the interface, shall be considered to be providing a service falling within point (a).

4. Point (b) of paragraph 1 shall not include:

(a)the making available of a digital interface where the sole or main purpose of making the interface available is for the entity making it available to supply digital content to users or to supply communication services to users or to supply payment services to users;

(b)the supply by a trading venue or a systematic internaliser of any of the services referred to in points (1) to (9) of Section A of Annex I to Directive 2014/65/EU;

(c)the supply by a regulated crowdfunding service provider of any of the services referred to in points (1) to (9) of Section A of Annex I to Directive 2014/65/EU, or a service consisting in the facilitation of the granting of loans.

5. Point (c) of paragraph 1 shall not include the transmission of data by a trading venue, systematic internaliser or regulated crowdfunding service provider.

6. In paragraphs 4 and 5:

(a)'trading venue' and systematic internaliser have the meanings given in points (24) and (20) respectively of Article 4(1) of Directive 2014/65/EU;

(b)'regulated crowdfunding service provider' means a provider of crowdfunding services who is subject to authorisation and supervision under any harmonisation measure adopted under Article 114 of the Treaty for the regulation of crowdfunding services.

7. Revenues resulting from the provision of a service falling within paragraph 1 by an entity belonging to a consolidated group for financial accounting purposes to another entity in that same group shall not qualify as taxable revenues for the purposes of this Directive.

8. If an entity belonging to a consolidated group for financial accounting purposes provides a service falling within paragraph 1 and the revenues resulting from the provision of that service are obtained by another entity in the group, those revenues shall be deemed for the purposes of this Directive to have been obtained by the entity providing the service.

9. Services falling within paragraph 1 are referred to in Chapters 2 and 3 as taxable services.

Article 4 - Taxable person

1. Taxable person, with respect to a tax period, shall mean an entity meeting both of the following conditions:

(a)the total amount of worldwide revenues reported by the entity for the relevant financial year exceeds EUR 750 000 000;

(b)the total amount of taxable revenues obtained by the entity within the Union during the relevant financial year exceeds EUR 50 000 000.

2. Where an entity reports or obtains revenues in a currency other than euro, the revenues shall be converted into euro for the purposes of paragraph 1 by applying the exchange rate as published in the Official Journal of the European Union on the last date of the relevant financial year or, if there is no publication on that day, the rate published on the previous day.

3. In paragraphs 1 and 2, the relevant financial year means the financial year covered by the latest available of the financial statements issued by the entity before the end of the tax period in question.

4. The rule in Article 5(1) shall apply in determining under paragraph 1(b) whether taxable revenues are obtained within the Union.

5. Taxable revenues shall be recognised for the purposes of this Directive as having been obtained at the time when they fall due, irrespective of whether the relevant amounts have actually been paid.

6. If the entity referred to in paragraph 1 belongs to a consolidated group for financial accounting purposes, that paragraph shall be applied instead to the worldwide revenues reported by, and taxable revenues obtained within the Union by, the group as a whole.

Chapter 2

PLACE OF TAXATION, CHARGEABILITY AND CALCULATION OF THE TAX

Article 5 - Place of taxation

1. Taxable revenues obtained by an entity in a tax period shall be treated for the purposes of this Directive as obtained in a Member State in that tax period if users with respect to the taxable service are located in that Member State in that tax period.

The first subparagraph applies irrespective of whether such users have contributed in money to the generation of those revenues.

2. With respect to a taxable service, a user shall be deemed to be located in a Member State in a tax period if:

(a)in the case of a service falling within Article 3(1)(a), the advertising in question appears on the user's device at a time when the device is being used in that Member State in that tax period to access a digital interface;

(b)in the case of a service falling within Article 3(1)(b):

(i)if the service involves a multi-sided digital interface that facilitates the provision of underlying supplies of goods or services directly between users, the user uses a device in that Member State in that tax period to access the digital interface and concludes an underlying transaction on that interface in that tax period;

(ii)if the service involves a multi-sided digital interface of a kind not covered by point (i), the user has an account for all or part of that tax period allowing the user to access the digital interface and that account was opened using a device in that Member State;

(c)in the case of a service falling within Article 3(1)(c), data generated from the user having used a device in that Member State to access a digital interface, whether during that tax period or any previous one, is transmitted in that tax period.

3. For each tax period, the proportion of an entity's total taxable revenues that is treated under paragraph 1 as obtained in a Member State shall be determined as follows:

(a)as regards taxable revenues resulting from the provision of services falling within Article 3(1)(a), in proportion to the number of times an advertisement has appeared on users' devices in that tax period;

(b)as regards taxable revenues resulting from the provision of services falling within Article 3(1)(b):

(i)if the service involves a multi-sided digital interface that facilitates the provision of underlying supplies of goods or services directly between users, in proportion to the number of users having concluded underlying transactions on the digital interface in that tax period;

(ii)if the service involves a multi-sided digital interface of a kind not covered by point (i), in proportion to the number of users holding an account for all or part of that tax period allowing them to access the digital interface;

(c)as regards taxable revenues resulting from the provision of services falling within Article 3(1)(c), in proportion to the number of users from whom data transmitted in that tax period has been generated as a result of users having used a device to access a digital interface, whether in that tax period or a previous one.

4. For the purposes of determining the place of taxation of the taxable revenues subject to DST, the following elements shall not be taken into account:

(a)if there is an underlying supply of goods or services directly between the users of a multi-sided digital interface referred to in Article 3(1)(b), the place where that underlying supply takes place;

(b)the place from which any payment for the taxable service is made.

5. For the purposes of this Article, the Member State where a user's device is used shall be determined by reference to the Internet Protocol (IP) address of the device or, if more accurate, any other method of geolocation.

6. The data that may be collected from users for the purposes of applying this Directive shall be limited to data indicating the Member State where the users are located, without allowing for the identification of those users.

Article 6 - Chargeability

DST shall be chargeable in a Member State on the proportion of taxable revenues obtained by a taxable person in a tax period that is treated under Article 5 as obtained in that Member State. The DST shall become due in that Member State on the next working day following the end of that tax period.

Article 7 - Calculation of the tax

DST shall be calculated for a Member State for a tax period by applying the DST rate to the proportion of taxable revenues referred to in Article 6.

Article 8 - Rate

The DST rate shall be 3%.

Chapter 3

OBLIGATIONS

Article 9 - Person liable for payment and fulfilment of obligations

1. DST shall be payable and the obligations in this Chapter shall be fulfilled by the taxable person providing the taxable services.

2. A consolidated group for financial accounting purposes shall be permitted to nominate a single entity within that group for the purposes of paying DST and fulfilling the obligations in this Chapter on behalf of each taxable person in that group who is liable to DST.

Article 10 - Identification

1. A taxable person shall notify the Member State of identification that the taxable person is liable to DST in one or more Member States.

2. The notification shall be made electronically by no later than 10 working days following the end of the first tax period for which the taxable person is liable to DST under this Directive ('the first chargeable period').

3. The Member State of identification shall be:

(a)the Member State in which the taxable person is liable to DST for the first chargeable tax period;

(b)if the taxable person is liable to DST for that tax period in more than one Member State, such one of those Member States as the taxable person chooses.

4. The notification required under paragraph 1 shall include at least the following information with respect to the taxable person:

(a)name;

(b)trading name, if different from the name;

(c)postal address;

(d)electronic address;

(e)national tax number, if any;

(f)contact name;

(g)telephone number;

(h)Member States where the taxable person is liable to DST;

(i)IBAN or OBAN number.

5. The taxable person shall notify the Member State of identification of any changes in the information provided under paragraph 4.

6. When an entity is nominated under Article 9(2), the information provided by that nominated entity under this Article with respect to each taxable person in the group shall also include information with respect to itself in relation to the items listed in points (a) to (g) of paragraph 4.

7. The Commission may adopt implementing acts to determine a common format for the notification required under this Article. Those implementing acts shall be adopted in accordance with the procedure provided for in Article 24(2).

Article 11 - Identification number

1. The Member State of identification shall allocate to the taxable person an individual identification number for the purposes of DST and shall notify the taxable person of that number by electronic means within 10 working days from the day on which the notification under Article 10 was received.

2. Each individual identification number shall have a prefix in accordance with ISO code 3166 Alpha 2 by which the Member State of identification may be identified. However, Greece and the United Kingdom shall use the prefix EL and UK respectively.

3. Member States shall take the measures necessary to ensure that their identification systems allow taxable persons to be identified and shall keep an identification register with all the individual identification numbers allocated by them.

Article 12 - Deletion from the identification register

1. A taxable person shall notify the Member State of identification by electronic means in any of the following circumstances:

(a)the taxable person ceases to obtain taxable revenues that are treated under this Directive as obtained in the Union;

(b)the taxable person ceases to qualify as a taxable person;

(c)the taxable person ceases to exist;

(d)the taxable person ceases to be liable to DST in the Union for any other reason.

2. The Member State of identification shall delete the taxable person from the identification register at the end of the period of 60 working days following the end of the tax period during which the information referred to in paragraph 1 was notified.

3. Article 10 shall apply if, following deletion of a taxable person from the identification register, the taxable person becomes liable once again to DST in the Union. References in Article 10 to the first chargeable tax period shall be read accordingly.

Article 13 - Change in the Member State of identification

1. Where a taxable person has chosen a Member State of identification under Article 10(3)(b), the taxable person shall be bound by that choice for the first chargeable period for which notification is made under Article 10 and for the two following tax periods.

2. However, if the taxable person ceases to be liable to DST in that Member State of identification chosen under Article 10(3)(b), the taxable person shall change its Member State of identification in accordance with the requirements of Article 10.

3. Any change in a taxable person's Member State of identification shall be notified to the existing Member State of identification, and that change shall apply from the tax period following the tax period in which that information is notified. The existing Member State of identification shall delete the taxable person from the identification register in accordance with Article 12(2).

4. That taxable person shall notify the new Member State of identification in accordance with Article 10, and references in that Article to the first chargeable period shall be to the tax period from which the change applies.

Article 14 - DST return

A taxable person shall submit to the Member State of identification a DST return for each tax period. The return shall be submitted electronically within 30 working days following the end of the tax period covered by the return.

Article 15 - DST return information

1. The DST return shall show the following information:

(a)the individual identification number referred to in Article 11;

(b)for each Member State where DST is due for the relevant tax period, the total amount of taxable revenues treated as obtained by the taxable person in that Member State in that tax period, together with the amount of DST due on that amount in that Member State for that tax period;

(c)the total DST due from the taxable person in all Member States for the relevant tax period.

2. The DST return shall also show, with respect to the tax period, the total amount of worldwide revenues and total amount of taxable revenues within the Union applicable for the purposes of Article 4(1).

3. The Member State of identification may require the return to be made out in their national currency.

4. Upon receipt of a DST return, the Member State of identification shall immediately allocate a DST return number to the return.

5. Member States shall take the measures necessary to ensure that their identification systems allow DST returns to be identified and shall keep a DST return identification register with all the individual DST return numbers allocated by them.

6. The Commission may adopt implementing acts to determine a common format for the DST return and the DST return number. Those implementing acts shall be adopted in accordance with the procedure provided for in Article 24(2).

Article 16 - Payment arrangements

1. The total DST due from a taxable person in all Member States for a tax period shall be paid by the taxable person in the Member State of identification.

2. The total DST due shall be paid to the Member State of identification no later than 30 working days following the end of the tax period concerned and, in making the payment, the taxable person shall make reference to the relevant DST return number.

3. If a taxable person makes a payment without reference to the relevant DST return number, or the reference number does not correspond to any outstanding DST return, the Member State of identification may take steps to clarify the issue. If the issue remains unsolved, the payment shall be returned to the taxable person, and the payment shall not be considered to be made for the purposes of paragraphs 1 and 2.

4. Payment shall be made to a bank account designated by the Member State of identification.

5. The Member State of identification may require the payment to be made in their national currency.

6. A Member State of identification which receives a payment in excess of the total DST due as indicated in the relevant DST return shall reimburse the overpaid amount directly to the taxable person concerned.

7. Where a Member State of identification has received a payment in respect of a DST return subsequently found to be incorrect and amended under Article 17, and that Member State has already distributed that amount to each Member State where DST is due, those Member States where DST is due shall each reimburse their respective part of any overpaid amount directly to the taxable person.

Article 17 - DST return amendments

1. Changes to the figures contained in a DST return shall be made only by means of amendments to that return and not by adjustments to a subsequent return.

2. The amendments referred to in paragraph 1 shall be submitted electronically to the Member State of identification within three years of the date on which the initial return was required to be submitted. Amendments after such period shall be governed by the rules and procedures applicable in each Member State respectively where DST is due.

3. Any additional payment by a taxable person of DST due derived from the amendments in paragraph 1 shall be made to the Member State of identification in accordance with Article 16, and references to total DST due shall be read accordingly. Any reimbursements to a taxable person of DST paid derived from the amendments in paragraph 1 shall be made in accordance with Article 16(7).

Article 18 - Accounting, record-keeping, anti-fraud, enforcement and control measures

1. Member States shall lay down accounting, record-keeping and other obligations intended to ensure that the DST due to the tax authorities is effectively paid. Such rules in a Member State shall apply to any entity with DST liability in that Member State, irrespective of the Member State of identification of that taxable person.

2. The Commission may adopt implementing acts to determine the measures to be taken pursuant to paragraph 1. Those implementing acts shall be adopted in accordance with the procedure provided for in Article 24(2).

3. Member States may adopt measures to prevent tax evasion, avoidance and abuse with respect to DST.

4. A Member State of identification chosen under Article 10 shall act on behalf of the other Member States where DST is due for the purposes of the obligations in this Chapter, but the DST shall be owed by the taxable person directly to each Member State where DST is due. Accordingly, each Member State where DST is due shall be entitled to enforce payment of the DST directly against the relevant taxable person. To that extent, the rules and procedures of each such Member State shall apply, including the rules and procedures relating to penalties, interest and other charges for late payment or non-payment of DST and the rules and procedures relating to the enforcement of debts.

5. Tax audits and control measures by Member States aimed at examining all the information and actions relevant to the calculation of a taxable person's DST liability in that Member State shall be governed by the rules and procedures applicable in that Member State.

Article 19 - Appointment of competent authorities

Each Member State shall designate the competent authority to be responsible in that Member State for managing all aspects related to the obligations set out in this Chapter and in Chapter 4, and shall notify the name and electronic address of that authority to the Commission. The names and electronic addresses of the competent authorities shall be published by the Commission in the Official Journal of the European Union.

Chapter 4

ADMINISTRATIVE COOPERATION

Article 20 - Exchange of information as regards identification

1. The Member State of identification shall transmit any notification received by it under Article 10 to the competent authority of each Member State where DST is due. The notification shall be transmitted within 10 working days from the day on which the notification was received.

2. The Member State of identification shall also inform each such Member State of the individual identification number allocated to the relevant taxable person under Article 11.

3. The Member State of identification shall also inform each Member State where DST is due of any deletion in the identification register made under Article 12 within 10 working days from the day on which the deletion has been made.

Article 21 - Exchange of information as regards the DST return

1. The Member State of identification shall transmit DST returns and any amendments to DST returns submitted to it under Article 14 or 17 to the competent authority of each Member State where DST is due. The returns and amendments shall be transmitted within 10 working days from the day on which they were received.

2. If a DST return is submitted in a currency other than euro, the Member State of identification shall convert the amounts into euro by applying the exchange rate as published in the Official Journal of the European Union on the last date of the tax period covered by the return or, if there is no publication on that day, on the previous day of publication, and shall transmit that information to the relevant Member States alongside the return, or amendment, transmitted to them under paragraph 1.

3. The Member State of identification shall transmit to the competent authorities of each Member State where DST is due any other information needed to link each payment with a relevant DST return.

Article 22 - Exchange of information as regards payment

1. The Member State of identification shall ensure that the amount that a taxable person has paid under Article 16 corresponding to the DST due in a Member State other than the Member State of identification is transferred to the competent authority of that other Member State. The transfer shall take place within 10 working days following the day on which the payment was received.

2. The amount referred to in paragraph 1 shall be transferred in euro to the bank account designated by that other Member State.

3. Member States shall notify the competent authorities of other Member States of the number of the bank account to be used for the purposes of paragraph 2.

4. Any amount received by the Member State of identification in a currency other than euro shall be converted into euro by applying the exchange rate as published in the Official Journal of the European Union on the last date of the tax period covered by the return or, if there is no publication on that day, on the previous day of publication.

5. If a taxable person pays a portion only of the total DST due from it, the Member State of identification shall ensure that that portion is transferred to the competent authorities of the Member States where DST is due in proportion to the tax due in each Member State. The Member State of identification shall inform the competent authorities of the Member States where DST is due thereof.

6. If a Member State where DST is due has reimbursed any overpaid amount directly to the taxable person under Article 16(7), that Member State shall inform the Member State of identification of the amount of those reimbursements.

Article 23 - Means of information exchange

1. Information and documentation to be transmitted under this Chapter shall be transmitted electronically.

2. The Commission may adopt implementing acts to determine the technical details by which such information and documentation is to be transmitted. Those implementing acts shall be adopted in accordance with the procedure provided for in Article 24(2).

Chapter 5

FINAL PROVISIONS

Article 24 - Committee procedure

1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 25 - Transposition

1. Member States shall adopt and publish, by [31 December 2019] at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately inform the Commission thereof.

They shall apply those provisions from [1 January 2020].

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication.

2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Article 26 - Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Article 27 - Addressees

This Directive is addressed to the Member States.