Plan to tax corporate profits in producer states dropped

The silicone docklands look to have dodged EU efforts to tax the digital economy as the expert group on taxation ditched the idea of taxing companies’ profits based on where their products are consumed.

The Taxation of the Digital Economy report, published yesterday by the high level expert group of the European Commission, recommended that Vat be applied at the point of consumption, but not that companies pay their corporate tax in jurisdictions where their products are used.

“The group welcomes the consensus that the destination principle — taxation at the place of consumption — is the way forward for Vat,” the report stated.