Testimony on EU Digital Services Taxes: Risks to Global Tax Cooperation and Economic Efficiency

• Fragmentation of Global Tax Rules: The Tax Foundation warns that unilateral digital services taxes (DSTs) by EU countries risk undermining international tax cooperation and the OECD-led global tax framework.
• Economic Distortion and Double Taxation: DSTs target revenue rather than profit, leading to disproportionate tax burdens on digital firms and increasing the risk of double taxation, especially for U.S.-based companies.
• Call for Policy Alignment: The testimony urges EU policymakers to reconsider DSTs and instead support multilateral solutions like Pillar One of the OECD/G20 Inclusive Framework to ensure fair and efficient taxation of the digital economy.

Source Tax Foundation

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