Overview
A commission assessment dated May 28 estimates that applying a 3% digital services tax across the European Union could produce up to €5 billion per year. The paper, prepared to inform negotiations over the bloc's next seven-year budget, also set out potential receipts from several other sector-specific taxes.
Additional revenue streams identified
The assessment put the maximum potential revenue from an online gambling tax at about €1.9 billion annually. A proposed crypto transaction tax was estimated to generate between €3 billion and €4 billion each year. Separately, a capital gains tax on crypto assets was projected to raise between €1 billion and €2.4 billion annually, though the commission cautioned that the cryptocurrency market is difficult to quantify reliably across different member states.
Budget context
The estimates come as member states discuss a proposed €2 trillion multiannual budget projected last July and set to begin at the end of next year. While most funding is expected to come from direct contributions by EU countries, the commission has advanced options for additional levies that would broaden revenue sources. These include a proposal to tax large companies, allocations tied to tobacco excise receipts, and levies on unreturned electronics.
Political and legal hurdles
EU leaders have asked the commission to examine extra revenue options, including the measures in the assessment. The commission has indicated that its planned tax on large companies would encompass both a gambling tax and a digital tax.
However, implementing a digital or gambling tax at EU level would require unanimity among member states for sector-specific legislation to harmonize the tax base prior to proposing a new levy. The assessment notes that this is a politically sensitive step, since many EU countries are reluctant to cede taxing authority to the commission.
The assessment provides numerical estimates and procedural constraints but does not resolve the political or technical challenges required to enact these levies.