Exclusive: EU-wide digital levy might generate up to €25bn annually for next budget

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Key takeaways

The European Parliament estimates a new digital levy could raise up to €25.2bn annually.
The proposal expands the tax base to include streaming, data processing, online gambling, and crypto assets.
Member states remain sceptical due to potential US trade retaliation and implementation challenges.

New estimates for EU digital taxes

A digital levy proposed by the European Parliament to help fund the EU's next long-term budget could raise up to €25bn a year, according to leading MEP Danuše Nerudová. The new estimates put the yield of the Parliament's proposed EU-level taxes far above what the European Commission originally calculated.

Talks are at a crunch point. EU countries are scrambling to agree the next Multiannual Financial Framework (MFF) by the end of the year, and new “own resources” flowing directly into EU coffers remain a key flashpoint.

“We need new own resources to cover the repayment of the joint debt and to fund new priorities in the EU budget,” Nerudová (Czechia/EPP) told Euronews.

She asked Parliament's services to assess how much the proposed EU-wide taxes on online gambling, digital services and crypto assets could raise. Their findings differ sharply from the Commission's.

Broader tax base and higher rates

According to the Parliament's estimates, seen exclusively by Euronews, the digital levy could raise up to €25.2bn a year, five times the Commission's figure.

“The European Parliament is calculating with a much broader tax base than the Commission. The tech space also covers, for example, streaming and data processing services, which the Commission completely omitted,” Nerudová said.

The Parliament's proposal widens the levy's scope well beyond advertising and intermediation services and raises the rate from 3% to 5%. The Commission's estimate was based on existing digital services taxes in France, Spain and Italy.

“This is a very conservative estimate, even though it's much higher than the Commission's proposal. But the huge difference is the tax base we are using in our estimates,” Nerudová continued.

Geopolitical concerns and specific sector yields

Several member states, meanwhile, have expressed scepticism about a digital levy over “geopolitical concerns”, namely the risk that the US government could retaliate with new trade measures.

“These reactions are coming even without the digital levy. We have a lot of tech giants here, running their business all around Europe without paying a fair share. This is the tool to tax those companies, which are not on the same level playing field as the European ones,” Nerudová said.

“This is the right tool to raise money for the EU budget in a sustainable way,” she added.

The Parliament's estimate for online gambling is more than double the Commission's, at €3.9bn against €1.9bn. It also puts the yield of a capital gains tax on crypto assets at €3bn, compared with the Commission's €2.4bn.

The tax on online gambling faces stark resistance from Malta, home to the European headquarters of many online betting operators. The capital gains tax on crypto assets is generally regarded favourably, but also as very difficult to implement, as it would be easy to circumvent and subject to the volatility of this market.

Asked whether the Commission could implement the taxes in time for the start of the next budget period in 2028, Nerudová said negotiations were already behind schedule.

“The crypto asset tax might be complicated, but a digital levy is quite easy to implement at EU level,” she said.

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