EU: Resolution of European Parliament on taxing digital economy

A resolution concerning digital taxation, the tax residency of digital companies, and a possible European digital tax

A resolution concerning digital taxation

The European Parliament (EP) at a 29 April 2021 plenary session adopted a resolution concerning digital taxation, the tax residency of digital companies, and a possible European digital tax.

Read the resolution "Digital Taxation: OECD negotiations, tax residency of digital companies and a possible European digital tax”


The measure was first discussed by the Parliament’s FISC subcommittee in March 2021. Read a KPMG report

The text of the resolution is consistent with the version approved by the Parliament’s ECON Committee, but updated to reflect relevant international developments since March 2021. 


The resolution reiterates the views of the European Parliament (EP) for the need for a “swift” global agreement on taxing the digitalized economy, in the broader context of addressing base erosion and profit shifting (BEPS) and the perceived mismatch between taxation and value creation.

According to the EP, current international tax rules—based on the physical presence of companies—are no longer appropriate or fit for this purpose. Moreover, tax challenges have been heightened by the shift to digitalized services and the rapid digitalization of most economic sectors in the context of the coronavirus (COVID-19) pandemic. The EP’s preference is for solutions that would tax profits, not revenues.

Members of the European Parliament (MEPs) called for the swift adoption of a global solution at the level of G20/OECD Inclusive Framework members—which some believe is more likely to receive unanimous support in the EU Council. However, regardless of the progress made at global level, MEPs are of the opinion that the EU must have a fallback plan and be prepared to go forward with its own proposal (by the end of 2021) on taxing the digitalized economy. In particular, MEPs call on the European Commission, as a first step, to consider introducing a temporary EU digital services tax as an own resource, which then could be rolled back at a later stage and replaced with the global solution.

For more information, contact a tax professional with KPMG’s EU Tax Centre

Robert Van der Jagt | +31 88 90 91 356 |

Raluca Enache | +31 88 90 91 465 |



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