Zavod 14 is pleased to present a publication on Tax policy and transparency reforms for promoting the competitive EU digital economy, supported by Friedrich Naumann Foundation for Freedom (FNF). The digital economy is transforming the way citizens behave, and businesses operate in a highly globalized economy. Digital companies are developing and growing far faster than the overall economy, and this trend is expected to continue. As the digital transformation of the economy accelerates, governments are struggling to find appropriate solutions which can ensure fair and effective taxation, as the existing corporate taxation rules are outdated to catch such evolution. Namely, the application of the current corporate tax rules to the digital economy has led to a misalignment between the place where the profits are taxed and the place where value is created. Accordingly, there is recognition at the international and European Union (EU) level that action is needed to adapt corporate tax rules to the digital economy.
The main objective of the publication is to provide a theoretical overview and to examine the secondary data about the following areas considering tax policy and transparency reforms for promoting the competitive EU digital economy: (1) conceptualization of the digital economy; (2) digital economy in the EU; (3) tax policy challenges for the EU digital economy; (4) taxation of the digital economy; (5) digital transformation of tax administration and (6) policy recommendations. The main purpose of the study, which examines the state-of-the-art in the field of tax policy and transparency reforms for promoting the competitive EU digital economy, is to identify challenges and opportunities to improve the current state of the tax system in the EU countries through cross-country comparison. The findings derived from this study are interesting from the academic (research and debate) and the practical (suggestions for improvements) perspective. The research is carried out on literature review and analysis of the secondary data by different stakeholders, e.g., Eurofound, European Central Bank, European Commission, Tax Foundation, United Nations, World Bank, other international organizations, governments’ institutions, and others. The publication reveals that the EU will need a robust, efficient, and fair tax framework that meets public financing needs and suits the specifics of the digital economy while also fostering the twin (green and digital) transition of the EU economy
Download the full publication here:Tax policy and transparency reforms for promoting the competitive EU digital economy
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