Fair tax system for sharing economy eyed
EESC insists on introduction of a reasonable income threshold
Maria Koleva, Brussels
3 November, 2017
A dynamic and fast evolving cross-sector field, collaborative economy, imposes new business models and new entries but for its smooth fly further clarifications are needed of how it should be regarded in the market space. Called also “sharing” economy, it is estimated that this business sector could entail in the years to come turnover of up to 572bn across the EU.In its opinion “Taxation of the collaborative economy - analysis of possible tax policies faced with the growth of the collaborative economy”, requested by the Estonian presidency and adopted at the last EESC plenary session, the committee called on the Commission and the Member States to apply existing fiscal regulatory systems and tax regimes to this sector. As Giuseppe Guerini, the rapporteur on the opinion said, the legal framework must lead to a fair and balanced tax system for all economic activities and business models. Explaining that big players like Google trade with collected data and advertisements on digital platforms, and intermediary platforms like Uber match demand and supply, creating benefits for service providers and the platform itself, he pointed out that “on the other hand, you have peer-to-peer activity, such as the exchange of goods, which normally does not imply a monetary transaction.” It is important to make a clear distinction between businesses in the collaborative economy that merely make use of existing value and those that actually create shared social value by increasing citizen participation, he added.Maintaining the standpoint that the collaborative economy may offer a new opportunity for growth and development, the EESC underlines that it is crucial for fiscal regulatory systems and tax regimes to be adapted in an intelligent and flexible way. In fact, the regulations on taxation now in force do not properly consider new business models and economic activities which produce legal and tax-related uncertainty, twist competitiveness, and lead to tax avoidance and revenue loss. To get over these issues the EESC urges national authorities to step up their cooperation and adapt their regulations to the new economic environment, providing a clear set of rules on tax obligations. The consultative body further advocates for rapid construction of a uniform, integrated European system that ensures common rules for the different Member States.Tax regulation must be in line with the Commission’s overall objective to tax profits where they are made, stressed Krister Andersson, co-rapporteur of the opinion, noting that businesses in the collaborative economy should be taxed the same way as other businesses in the Member States. European authorities must establish channels of cooperation beyond Europe in order to lay down some ground rules for a truly digital economy, he opined.The Committee stresses that the introduction of a reasonable income threshold could help to regulate the taxation of revenue.
Tax regulation must be in line with the Commission’s overall objective to tax profits where they are made, stressed Krister Andersson.