A EU digital tax: A clear sign from Europe in times of tariff wars

Press Release – A EU digital tax: A clear sign from Europe in times of tariff wars
Strasbourg, April 1st 2025

Our new paper published today, conducted by CEPS, reveals that large digital corporations often pay significantly lower taxes than traditional businesses. This distorts competition and deprives Member States of important tax revenues. A 5% digital tax on e-commerce, digital advertising, and cloud services could generate about 37,7 bn. Euros annually by 2026.

The digital tax is also highly popular: A representative Civey survey commissioned by us, with 10,000 participants from across Germany, shows that higher taxes on digital companies are popular among German citizens.

Rasmus Andresen, Member of the European Parliament and economic policy spokesperson for the Greens in the European Parliament, comments:
“Trump’s trade threats need a strong response from the EU. We need to impose a digital tax as a clear sign that we won’t be Trumps puppets and the EU as the world’s largest single market is a strong partner with its own interests and resources in brains, technology and innovation.

Targeting leading US platforms—such as streaming giants, e-commerce hubs, and cloud services—sends a strong signal: trade conflicts hurt everyone, with the US being especially vulnerable. A digital tax isn’t merely a response; it’s a calculated strategy to spur dialogue and mitigate economic risks.

“From 2028 onward, we need to start repaying the debt that has been generated with the Recovery Instrument (NextGenerationEU). We risk a cut in programs, like Erasmus, and social initiatives, if we don’t introduce new Own Resources.A digital tax is one possible way to generate new funds and can contribute a lot as a revenue to the new Multannual Financial Framework 2028-2034.”

You can find the full version of the study here: https://api.rasmus-andresen.eu/wp-content/uploads/2025/04/Study_Toward-a-European-digital-tax_01042025_RasmusANDRESEN_final.pdf