European Economic and Social Committee 17 July 2019, Opinion of the European Economic and Social Committee on ‘Taxation in the digitalised economy’(Own-initiative opinion)

Also known as

The European Economic and Social Committee (EESC) advocates for a globally coordinated reform of international tax rules to address the digitalisation of the economy, emphasizing that profit allocation should remain aligned with value creation and the arm’s length principle. To prevent revenue losses in net-exporting Member States, the EESC proposes a four-factor allocation formula—incorporating capital, labour, sales, and R&D—specifically for the distribution of residual profits from marketing and product intangibles. While supporting the OECD/G20 Inclusive Framework, the Committee maintains that the EU should consider unilateral action to eliminate under-taxation and ensure a level playing field if a global consensus is not reached by 2020.AI