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EU Creates Expert Group to Study How to Tax Digital Companies

European Union experts will study how to tax “the digital economy” and recommend next steps for making sure technology companies pay their fair share, the European Commission said.

A high-level expert group will be assembled to identify problems and recommend solutions. The Brussels-based commission then will make proposals on how to implement the recommendations.

“Currently corporate tax avoidance and aggressive tax planning are particularly problematic in the digital economy,” the commission said today. “This is due to the global and intangible nature of these companies, and the fact that today’s tax rules were not designed with e-commerce in mind.”

EU leaders meeting in Brussels this week will seek to coordinate views on efforts to tackle tax avoidance and tax base erosion. According to draft conclusions for the Oct. 24-25 summit, the EU is considering action on issues specific to the digitial economy, like different tax rates for physical and electronic products.

The commission said the expert panel will be comprised of up to seven members, who will be “internationally renowned experts” on taxes and on the technology and online sales sectors. The group “will be chaired by a person of political profile with relevant background,” the EU said.

“Today’s tax systems were conceived in a pre-computer age,” EU Tax Commissioner Algirdas Semeta said in a statement today. “It is no surprise that they often clash with the modern, digital economy.”

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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