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Taxing the digital economy: Good reasons for scepticism

May 21, 2019
Region:
Digital taxation is currently a subject of intense debate and since large digital companies are widely thought to pay inappropriately low taxes, policymakers remain under pressure to act. However, all approaches which are based on the taxation of revenues instead of profits have major flaws. As digital services expand into ever new areas of the economy (‘smart everything’), the risk of a far-reaching, arbitrary taxation of entrepreneurial activities is increasing. Disruption, the buzzword of the digitalisation discussions, may become an issue in international tax policy, too. In addition to an (international) digital tax, minimum taxes are one of the concepts under discussion. [more]

More documents about "Europe"

164 Documents
April 3, 2020
Region:
2
In their fight against the spread of COVID-19 over the last weeks, EU governments introduced temporary restrictions to border traffic of various degrees ranging from border controls to outright closure. In several cases this had a severe impact on freight traffic as border controls led to tens of kilometres of traffic jam, such as between Poland and Germany. [more]
March 18, 2020
Region:
Topic:
3
The competition for global AI leadership is speeding up. But it already seems to be a two-horse race between the US and China. Europe faces an imminent risk of falling far behind if the EU and its members do not react rapidly and boldly. This could have broad implications for Europe's competitiveness, future wealth and political stability. The Commission's recently published White Paper on AI and its communication on a European strategy for data are crucial steps to formalise the debate on addressing the AI challenge in Europe. While the EU's strategy goes in the right direction, several points need to be clarified, in particular regarding the investment gap towards the US and China, finding the right balance between regulation and competitiveness of the EU's AI industry, and data access for AI research. [more]
February 25, 2020
Region:
4
Last week's special Council meeting on the next EU budget 2021-2027 ended without an agreement. When EU leaders left Brussels on Friday after close to 30 hours of negotiations, there was no timeline set for further talks. In our view, it would have been a surprise if the meeting had led to a big breakthrough, given the traditionally contested nature of negotiations between net contributors and recipients of the seven-year budget. This time, the situation is much more complicated, as Brexit leaves a sizeable gap of around EUR 60-75bn in the ~EUR 1tr budget. Still, despite the meticulous preparations of Council President Charles Michel, including a marathon of bilateral meetings with EU leaders ahead of the summit and a new compromise budget proposal, not even a preliminary agreement regarding the approximate size of the Multiannual Financial Framework (MFF) could be reached. [more]
January 21, 2020
Region:
5
The global map shows the inflation targets of developed and emerging markets. In emerging economies central banks tend to have higher inflation targets than the central banks in their developed counterparts. The difference generally arises from their stronger inflation rates partly due to lower productivity in tradeable goods production in emerging markets. This key feature is likely to persist as the catch-up process of many emerging markets will continue for some time. [more]
December 19, 2019
Region:
6
European banks continue to strive to not fall further behind. Revenues and costs in the first three quarters of 2019 were flat compared to their levels a year ago. Remarkably, interest income rose despite even lower interest rates. Loan loss provisions edged up from record lows. Net profits fell moderately but remained solid. Balance sheet growth was the strongest in years as banks fight to hold their ground against an array of new competitors. Along with the struggle to improve revenues, 2020 may be shaped by Basel IV implementation, continuing geopolitical risk and a fragile macroeconomy. [more]
December 17, 2019
Region:
Analyst:
7
With their „European Green Deal“, the European Commission expressed an admirable ambition to be climate-neutral by 2050. Are such ambitious long-term goals good for the credibility of European climate protection policies? Especially when they include only the vaguest notions of how to get there, and when the measures for more efficient climate protection that can be implemented in the short-to-medium term are not making sufficient progress? I don’t think so. [more]
September 23, 2019
Region:
8
Improved performance in the second quarter has given European banks hope that 2019 may still end on a more conciliatory note and that longer-term prospects are not quite as gloomy as some fear. In H1, net interest income rose year-over-year, despite unrelenting margin pressure. Other revenue components were mixed, with fee and commission income disappointing again. Loans and total assets in general increased. Banks cut expenses further, while loan loss provisions picked up from record lows. In the end, profitability and capital levels remained largely stable. Once more, the transatlantic gulf in performance widened slightly, as US banks reported another rise in net income to a new all-time high. [more]
August 22, 2019
Region:
9
The digital transformation has enriched societal discourse through new forms of multilateral communication, but it has also amplified the spread of misinformation, echo chambers and propaganda, offering authoritarian states new means of surveillance and control. How democracies approach this challenge will be a key factor in their performance, given intensifying competition among political systems. [more]
June 4, 2019
Region:
Analyst:
10
Artificial intelligence (AI) is a significant step forward in the digitalisation and transformation of modern businesses. Investors are lining up to be part of the imminent change. AI attracted USD 24 bn in investments globally in 2018, a twelvefold increase since 2013. Within Europe, Germany, France and the UK are the frontrunners in experimentation and in the implementation of AI. Similar to earlier examples of information technology (IT) implementation in financial services, AI promises great efficiency gains and potential revenue increases and its potential contribution to bank profitability should not be underestimated. [more]
May 23, 2019
Region:
11
Results from the 23-26 May EU elections will not be published before late Sunday evening, final numbers not before Monday morning. Polls continue to indicate a loss of the conservatives' and social democrats' traditional majority while right-wing and left-wing Eurosceptics could gain more than 35% of the seats in the next EP. We do not expect any Council decisions on the next Commission President and other key positions before the June 20-21 summit. But negotiations between leaders on the EU's top jobs could last much longer and also a lengthy standoff between the Council and Parliament over the "Spitzenkandidaten" procedure cannot be excluded. [more]
May 23, 2019
Region:
12
Shrinkage – and no end in sight: in the first quarter of the year, the European banks once more saw revenues and costs alike decline compared to 12 months ago (-2% each). Non-interest income was particularly weak. As a result, profitability dipped, with loan loss provisions also rising, albeit from very low levels. Banks tried to make up for the revenue loss by taking more risk and expanding their balance sheets. Total assets and risk-weighted assets both increased by 4%. Consequently, the average CET1 capital ratio fell 0.4 pp yet remained in comfortable territory. [more]
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