Ursula von der Leyen sent a rather unequivocal message to large tech companies from Strasbourg: the rules on the European digital market are set by Europe, not Big Tech. While the Commission is preparing new rules against addictive design of platforms and trying to build its own capacities in artificial intelligence, the European Parliament is reopening a particularly sensitive question – should the largest digital platforms be charged a special levy for operating in the European market.
EU sets the rules
– We set the rules, not the large tech companies – Ursula von der Leyen stated in her State of the Union address, in the section dedicated to the digital space.
This message does not only pertain to existing regulations. The Commission is preparing the Digital Fairness Act by the end of the year, which aims to further restrict the so-called addictive design of digital products, problematic personalization, certain influencer practices, and other ways in which digital platforms can exploit user vulnerabilities. Part of this Act also concerns today’s announcement regarding limiting access to digital networks for minors.
But that is not the only thing ‘cooking’ in Brussels. The European Parliament, in its position for the next multiannual financial framework, or for the European budget from 2028 to 2034, has requested an investigation into the possibility of introducing a tax on digital services.
Croatian MEP Karlo Ressler, a member of the parliamentary Budget Committee, recently described the possibility of such a model as a kind of compensation for large tech companies for access to the European market.
Such a formulation aptly describes the political logic emerging in part of the Parliament, where a tax model has not yet been determined. Brussels currently has no finalized proposal for a European digital levy, no specific rate, nor a final definition of what would be taxed. However, the discussion is open.
Not a new idea
The digital levy is actually not a new idea. The Commission prepared a similar proposal back in 2021 as a potential new source of revenue for the European budget. The plan was then linked to international negotiations on reforming the taxation of multinational companies. The European Parliament advocated a model whereby revenues from such a levy would become the EU’s own revenue, among other things, for financing the European budget and repaying debt incurred through NextGenerationEU.
The project did not materialize according to the original schedule, partly due to attempts to resolve the taxation of large multinational companies through a global agreement within the OECD.
Five years later, the proposal is back on the table at a time when the EU again needs new revenues for a budget that simultaneously wants to finance defense, competitiveness, and technological development while repaying debt incurred through the Recovery and Resilience Facility.
Namely, the Parliament is seeking that the new own resources of the EU reach around 60 billion euros annually, and the tax on digital services is among possible alternative sources if some other proposed measures do not receive support from member states.
A similar levy already exists
Currently, a similar tax on revenue generated from certain digital services in the European market, in the EU, at least in some member states, already exists. France, for example, charges three percent of revenue from certain digital intermediation services and targeted online advertising from companies that exceed prescribed global and domestic revenue thresholds. In 2024, it collected approximately 756 million euros from this. Italy has a rate of three percent and collected about 455 million euros in 2024, while the Spanish tax also amounts to three percent and brought in around 375 million euros in the same year. Austria applies a rate of five percent on certain digital advertising.
