On 21 March 2018, the European Commission published a proposal to introduce a tax on gross revenue which been derived from the activities of certain digital services by companies. The tax will be based on where the revenue is generated instead of where the company is located. The aforementioned proposal will be followed by structural changes to the definition of a permanent establishment (PE). The digital services provided will create a deemed or virtual PE in a country where a service provider does not have a physical presence. The effective date of introduction of the tax on digistal services is scheduled for 1 January 2020.
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