EU: European Parliament workshop on possible EU-wide DST
Four expert panelists provided pros and cons, design options, revenue potential, and the international context
The European Parliament on June 23, 2026, held a workshop on a potential EU-wide digital services tax (DST) where four expert panelists provided pros and cons, design options, revenue potential, and international context.
The discussion identified a structural mismatch between the digital economy and traditional corporate tax rules. The panelists highlighted that current rules are built around physical presence, such as permanent establishments (PEs) and headquarters, while large digital companies can generate substantial revenues in countries where they have little or no physical footprint. Accordingly, concerns were raised about tax fairness, the erosion of member states’ tax bases, and possible negative impacts on competitiveness, innovation, and EU strategic autonomy.
The panelists highlighted that several EU countries have already introduced DST-style measures (including Austria, Denmark, Finland, France, Hungary, Italy, Poland, Portugal and Spain, Türkiye, and the UK) with considerable differences in terms of scope, thresholds, rates, and reporting requirements, which is seen as a source of fragmentation in the single market and a driver of trade-related challenges and broader geopolitical risks. The panelists also referred to the stalled negotiations on Pillar One, which focuses on the reallocation of taxing rights to market jurisdictions. A panelist also provided an update on the work performed at the level of the United Nations, including the two early protocols on cross-border services and dispute resolution.
Read a July 2026 report prepared by KPMG’s EU Tax Centre