Online broadcasting reform agreement reached between EU institutions

Viewers will be able to watch news and current affairs programmes from across the EU online under new arrangements agreed by the European Council and Parliament.

All radio productions will also be made available across borders under the new copyright rules, along with drama and other programmes that are wholly financed by the broadcaster. The regulations apply to live online broadcasts and catch up services.

But sport programming is excluded, along with co-financed productions whose business model depends on them being sold to different broadcasters.

Conservative Legal Affairs spokesman Sajjad Karim MEP has followed the agreement as shadow rapporteur and was present during today’s negotiations. His amendments helped improve the balance between giving viewers greater access to programmes and protecting financing models without which many popular programmes would not be made.

Karim said: "I am pleased that viewers and expats will now be able to watch news and current affairs programmes and listen to radio broadcasts when living abroad.

"Striking the right balance between giving access to programmes and protecting our vital audio visual sector  was hugely important to me in the negotiations.

"I was delighted to have secured improvements to the final legislation which ensure broadcasters remain free to determine with broadcasters from other member states how to best reach viewers from other countries. This will ensure high quality content can be enjoyed by viewers but without hampering the financing of the AV sector, which often relies on financing from other member states broadcasters, which are in return given exclusive licenses for their territory.

"This proposal builds on the portability regulation which entered into force in April and enables viewers to access their paid for subscriptions to platforms including Netflix and the ITV Hub across the EU."

The new rules will be introduced by member states within two years. The European Commission will subsequently conduct a review of their operation.

Meanwhile, the European Parliament has adopted both its two opinions on the proposals for Council directives on the corporate taxation of a significant digital presence and a Digital Services Tax (DST) by an overwhelming majority.

MEPs added to the list of services that qualify as taxable revenues the supply of “content on a digital interface such as video, audio, games, or text using a digital interface”, regardless of whether the content is owned by that entity or if it has acquired the rights to distribute it. Online platforms selling digital content, such as Netflix, can therefore be taxed.

MEPs agreed to reduce the minimum threshold above which a company’s revenues are liable to be taxed. The rules would apply to any entity generating revenues within the EU of more than EUR 40 000 000 during the relevant financial year. The European Commission had proposed that this should be EUR 50 000 000.

MEPs underlined that the DST is a temporary measure. Adopting the Significant Digital Presence, the Common Corporate Consolidated Tax Base or similar rules reached at the OECD or at UN level would be permanent solutions.

The rapporteur on the Digital Services Tax Paul Tang (S&D, NL) said: ““Both the European Parliament and the European people want tech giants to pay their taxes. That is why we voted for a more ambitious digital service tax, also taxing revenues from online streaming services. We are talking about basic fairness, where everyone pays their fair share”.

The rapporteur on the Significant Digital Presence Dariusz Rosati(EPP, PL) said: “Taxes have to be paid where a company creates its value - irrespective of if it is a digital or a traditional enterprise. The quarrels and mutual vetoes in the Council lead to the EU being unable to tackle this problem. The European Union should be a trendsetter, while also continuing to work on an international solution at OECD level. It is high time to act!".

The report on the digital services tax directive was adopted with 451 votes in favour, 69 against and 64 abstentions.

The report on the corporate taxation of a significant digital presence directive was adopted with 439 votes in favour, 58 against and 81 abstentions

The Parliament has a consultative role when it comes to taxation laws, (Art. 115 TFEU). Therefore, it will be up to the Council to decide by unanimity on the final content of the rules. The Parliament is pushing for an approval before the end of its mandate in April 2019.

In July 2013, EU ministers agreed on the need to establish a common corporate tax base. The European Commission then split its previous 2011 proposal into two directives: a directive establishing a common corporate tax base (CCTB), and a directive on a common consolidated corporate tax base (CCCTB). Both draft directives were tabled in October 2016 and are still awaiting Council’s agreement. 

In its resolutions, the European Parliament strongly supported this major reform of corporate taxation and introduced the notion of “digital presence” that would enable member states to tax digital companies.

In March 2018, the European Commission presented two distinct legislative proposals on a fairer taxation of digital activities in the EU. The first proposal (Corporate taxation of a significant digital presence), presented as the preferred solution, aims to reform corporate tax rules, so that profits are registered and taxed where businesses interact with users through digital channels. The second proposal (Digital Services Tax) is an interim tax which covers the main digital activities that currently escape tax altogether in the EU.

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Martin Banks

Martin Banks

Martin Banks is a highly qualified journalist with many years experience of working within the EU institutions. He is an occasional, and highly valued, contributor to EU today, writing on a wide variety of issues.

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