.. services on platforms used by European consumers should be subject to VAT, an essential component of taxation in the digital economy.
The question is how VAT could be applied when digital communication services and social network customers use these services for no apparent charge. Digitalisation and automated reporting of information have allowed tax authorities and companies to save time and money. Data collection can be used to tackle underreporting, tax evasion and fraud. Software that submits sales data directly to tax authorities has already increased some countries’ VAT revenues significantly.
VAT revenues represent an own resource for the EU budget and the EESC considers that digital services should also be included in the tax base.
Source: eesc.europa.eu
