EU overturns digital tax: New taxes for tech companies from 2028!

EU overturns digital tax: New taxes for tech companies from 2028!

The European Commission has made a radical decision in its new budget draft: the planned digital tax for large tech companies such as Apple, Microsoft, Google and Meta will be canceled. This was officially announced by the Commission today, July 15, 2025. The tax originally set up, which was intended to pay off debts from the corona pandemic, is now to be replaced by alternative sources of income, which will come into force from 2028. stadt-bremerhaven.de reports that the new proposals include an EU-wide tobacco tax, a levy on electronic waste and a corporate tax for companies with a turnover of more than 50 million euros in the EU.

How does this turnaround come about? The decision is closely linked to the ongoing trade negotiations between the EU and the USA. As part of these negotiations, possible special tariffs by the USA against European products were temporarily suspended. The EU now has 90 days to reconsider possible countermeasures, including the digital tax. But how does the EU want to deal with the new challenges? golem.de notes in this context that the new sources of revenue are encountering resistance in several member states and it remains unclear how and whether the proposals will ultimately be implemented.

The perspective of the member states

The issue of digital tax has divided the entire EU. The majority of politicians in Germany are in favor of introducing it, as a five percent tax could provide states with up to 37.5 billion euros in additional revenue annually. Nevertheless, agreement at EU level remains difficult. Loud zeit.de Some countries want to avoid a digital tax at all costs because they fear it could lead to increased costs for consumers.

The negotiations show how complex the interaction between economic interests and political decisions is. While some states are aiming for a digital tax to break the dominance of big tech companies, industry associations such as Bitkom are warning about the consequences of such a tax. They fear this could ultimately raise prices for everyone. The trade dispute between the USA and the EU thus contributes to the uncertainty: a digital tax could increase the tax burden on tech companies, which currently only have to pay an average of around ten percent in taxes.

The role of economists and the future of tax policy

Economists agree that a digital tax could be an appropriate response to US tariffs, but the US response remains questionable. Another problem is that the EU itself cannot raise taxes, as this is the responsibility of the individual member states. The topic therefore remains hotly debated. zeit.de states that proposals for the design of the tax do not tax hardware or software, but rather specifically target companies' advertising revenue.

Overall, the EU faces a difficult challenge when it comes to finding a fair and price-stable solution. How the situation will develop is uncertain, but one thing is clear: the discussions about the digital tax and alternative sources of income are far from over.