A change in the fiscal rules, provided by the European Union, is going to witness an increase in taxes for any purchase like digital content and smartphone applications. People purchasing products over the Internet are going to face an excessive amount of taxes on the transaction. Under the new legislation, which was first approved in 2008, the tax rate on services like digital storage, and movie streaming will be determined on the location of the consumer, and not on the company that will sell the product from its headquarters in Europe.
The taxation mentions their revamped rules could add up to $ 1 billion extra money for the European government. However, from this rule, which will decide the entire fate of the European Union, there is no specific algorithm on which country will have to pay the most in terms of taxes.
A tax on digital goods, which is similar to the sales tax in the United States, is definitely a move by the lawmakers of the region. Companies like Amazon and Apple were criticized for having headquarters in European regions that have low taxes like Ireland and Luxembourg. Even though, they mentioned that the companies operate legally, one cannot misjudge the fact that those are countries that have extremely low taxes for any sort of digital items. So, this legislation is definitely going to cost them dearly in terms of finances.
Source: – NyTimes