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EU plans special tax on digital services revenue



The European Union plans to make some digital service providers pay tax in the countries where they do business. The move that will affect not just Google and Facebook but major European companies too — and perhaps make it easier for startups to enter the market.

There are two parts to the proposal: A quick fix, under which businesses will pay tax on their revenue from certain digital activities that mostly escape taxation, accompanied by a broader reform of the business taxation to ensure that tax is paid where profit is generated, rather than where accountants make it appear.

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