What the new mechanism proposes and who it will affect
The EU corporate levy is being proposed as an expansion of the Corporate Resource for Europe (CORE) initiative. Under the new proposal, the charge would apply to businesses operating in the EU with annual revenue above €100 million. For such companies an annual fixed payment in the range of €100,000 to €750,000 is being proposed.
This approach moves away from the idea of a targeted digital tax and would allow scope beyond just technology firms. Apple, Google and Meta appear on the list of companies that could be affected, but the initiative is aimed at a broad spectrum of large firms.
Why the EU abandoned a standalone digital levy
The initiative has drawn different positions across EU countries. Some states were concerned about worsening relations with the United States if a standalone digital tax was introduced. Other countries expressed reservations about the CORE mechanism itself and how it might operate in practice.
As a result, the compromise was to expand CORE rather than introduce a targeted levy for tech giants. The decision was also influenced by the reaction from Washington. In June, Donald Trump announced plans to impose a 100% tariff on goods from countries that levy a tax on digital services from American businesses, and the Office of the United States Trade Representative called such targeted levies discriminatory.
Comparison of the old and new approaches
To understand the essence of the changes it is worth looking at the key differences between what was proposed earlier and what we have now. The table lists only those characteristics that were mentioned during the debate on the initiative.
| Before | Now |
|---|---|
| A standalone digital tax aimed mainly at technology companies | Expansion of the CORE initiative to a wide range of large companies |
| Focus on leading internet platforms and services | Coverage of any enterprises with annual revenue above €100 million |
| The taxation mechanism was a matter of dispute between countries | Proposed annual fixed payment from €100,000 to €750,000 |
How this could affect the Ukrainian economy
Even if the changes take place in Europe, they have the potential to affect Ukraine via several channels. Increased fiscal pressure on large international companies could change their pricing of digital services, which would affect the cost of services for Ukrainian businesses and consumers.
Changes in tax rules in the EU could also affect trade with Europe and investment decisions by companies that operate both in the EU and in Ukraine. Those involved in export, import or who rely on prices for digital platforms and services should monitor developments closely.
