Win for Apple as EU Backs Down on Digital Services Tax

[IceCool]

The European Commission appears to have reversed its plans to impose a significant digital tax on large technology companies, including Apple.

The change was confirmed in a draft document circulated within the European Commission late last week that was obtained by Politico. The document outlines potential revenue sources for the EU's next seven-year budget, covering the period beginning in 2028.

Notably absent from this list is the widely discussed digital services tax, which had been under consideration as recently as May. The tax was framed as a tool to ensure that large digital companies contribute fairly to the European economy.

Apple has faced increasing regulatory scrutiny in Europe and was among the primary targets of the now-abandoned proposal. The digital levy would have imposed additional taxes specifically on digital companies generating significant revenue from European users without being physically based in EU member states.

Instead of the digital services tax, the Commission now proposes three new levies: an EU-wide excise tax on tobacco products, a tax on discarded electrical and electronic equipment, and a corporate levy on large companies with annual EU turnover exceeding €50 million, such as Apple. The proposals will require unanimous approval from all 27 EU member states.

The timing of the change is widely understood to be linked to ongoing negotiations over a new transatlantic trade agreement between the EU and United States. According to Politico, the Commission's decision to withdraw the digital levy is seen as an attempt to avoid derailing trade negotiations with the United States and secure more favorable terms in a prospective agreement.

The finalized proposal for the EU's 2028–2035 budget is scheduled to be published on Wednesday, July 16. While the digital services tax remains off the table for now, the outcome of the upcoming trade talks with the United States and the ongoing DMA enforcement actions will continue to shape the regulatory environment for Apple in the European Union.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Win for Apple as EU Backs Down on Digital Services Tax

Good. Would rather see the DMA get obliterated though…

 

[mazz0]

Wonder how this tax on discarded electronics will work. Sounds like a hard thing to police.

 

[twintin]

Why do you think the EU gov is entitled to Apple’s hard earned money?

For same reason Apple thinks they are entitled to take a cut of iOS apps revenue.

In Apples world, if anyone want to monitize their custom base, they have to pay.

Same here, if anyone wants to monitize om EUs custom base (citizens) they have to pay.

 

[yabeweb]

Why do you think the EU gov is entitled to Apple’s hard earned money?

The same reason why your country collect taxes from you... Why should Apple or anyone be exempt?

 

[Xiao_Xi]

Wonder how this tax on discarded electronics will work. Sounds like a hard thing to police.

If there is a law specifying which electronic devices must be discarded, the tax can be added at the time of sale of those items.

 

[racer1441]

There’s a thing called corporate tax that corporations pay to the government. It won’t involve average individuals. Whether said corporation will pass on those taxes to consumers fully is another matter. Basically Apple relies on infrastructure provided by EU to operate in EU. Apple doesn’t own any country in EU zone outright.

How about this?

Of course tariff is an import tax on average consumers. That’s NOT corporate tax.

All corporate taxes are paid by the customer. Companies are not out here printing money to pay taxes with. Every single dollar a company pays in tax comes from the consumer's pocket.

 

[racer1441]

I'm surprised I haven't seen much discussion on how it was also very likely the President Trump would have retaliated against the EU if this had happened.

 

[UliBaer]

Absolutely misleading title!
There is no "win" for Apple, because this involves all kind of "digital services" - not only from Apple.

[edit] This would be the right answer to the so called tariffs.
If there is an imbalance in trade goods, there is also an opposite imbalance in digital services!

 

[segfaultdotorg]

Congrats! Apple should stand up to EU tyranny more often.

 

[nikon1]

“The tax was framed as a tool to ensure that large digital companies contribute fairly to the European economy.”

What about all the programmers who are selling their software via these digital companies; the salaries paid to the EU employees of these digital companies?

This is just another “bail us out of our budget woes big digital companies!”

 

[dominiongamma]

Thank God the multi-trillion dollar company is safe 😮‍💨

Any day when the EU fails with regulations is a good day for everyone

 

[I7guy]

Is this a tit for tat with the tariffs? Should the US assess a similar tax.

 

[iPadified]

It is retaliation of the 30% tariff retaliation which is a retaliation of the trade deficiency and so it can go on and on. Pity Trump only see the goods chart when it should be the combined with services. About 50 billion euro in deficiency with EU. Not much to fight about in my opinion. I would not if it was reversed. So EU has about 75% of services sold compared to USA. Not bad for a regions that only regulates and does not innovate. Looking forward to when EU start innovating more in the service space as EC wants.

The EU has a surplus in trade in goods, and the US in services.
View attachment 2528803

EU-US trade: how tariffs could impact Europe | Topics | European Parliament

What will happen if the US imposes extra tariffs on EU products? Find out the facts about EU-US trade and what the EU could do in case of a trade war.

www.europarl.europa.eu

From page 11 of Towards a European Digital Service Tax: Renewing the momentum for a fair contribution.

https://aboutblaw.com/bhIM [PDF]

 

[iPadified]

Any day when the EU fails with regulations is a good day for everyone

Is this a regulation? DMA is a regulation, this is tax.

 

[uacd]

Noooo. Apple is already paying too little taxes!

Price of basic iPhone 16 Pro in Netherlands. Just gonna leave it here

1229 EUR is 1435 USD

 

[JapanApple]

Price of basic iPhone 16 Pro in Netherlands. Just gonna leave it here

View attachment 2528819

1229 EUR is 1435 USD

Well, you think that bad look at Japanese prices for us actually live in Work and use iPhones in Japan. And not using other currencies.

 

[GrumpyCoder]

I'm surprised I haven't seen much discussion on how it was also very likely the President Trump would have retaliated against the EU if this had happened.

Nothing to discuss. He'd have his usual online-meltdown, claiming a lot of nonsense followed by reverting it. Just a regular day for President TACO.

 

[ArtOfWarfare]

Digital services tax doesn't mean Apple will be paying it. It's the citizens of EU who will pay for it. When will people learn?

It's like saying China will pay for the Trump tariffs when in reality, it's the people of the US through inflation.

They're going to be charging taxes either way, and no matter what it'll impact how much EU citizens pay.
Taxes are applied here or there, in part, to encourage citizens and corporations to behave in a desirable way. As it sounds like this tax would have only applied to services from companies not within the EU, it sounds like they wanted to use the tax to encourage an increase in the number of positions that Apple (and others) have within the EU.

And there's no shortage of cascading effects from any tax policy changes, and we can be partisan and cherry pick whichever ones we do/don't like. Companies within China will suffer from a reduction in demand while companies within the US will see an increase in demand from the tariffs. And if there's no reduction in demand, then there's an increase in tax revenue which leads to the deficit being removed which... oh hey, look, the US Treasury reported a surplus last month. Something I couldn't find was a breakdown of monthly results from the US Treasury... I see mentions that June last had a surplus in 2017, but what about in the 8 years in-between... how often was there a deficit vs surplus, and how large were they all?

https://www.cnbc.com/2025/07/11/treasury-posts-unexpected-surplus-in-june-as-tariff-receipts-surge.html

 

[surferfb]

Price of basic iPhone 16 Pro in Netherlands. Just gonna leave it here

View attachment 2528819

1229 EUR is 1435 USD

The price in The Netherlands includes a 21% VAT, US prices doesn't include tax, which is often 5-10%. 79% of €1229 is €1,015 (or $1185), which is a lot closer to the $999 (out-the-door US price is $1,068, assuming a 7% sales tax, compared to the $1435 you cite).

Some reasons for the ~$200 difference:

• The EU mandates a 2-year warranty in the EU, as opposed to one year in the US
• Currency risk; exchange rates fluctuate and a buffer prevents frequent price changes
• There's a lot more administrative overhead in the EU (languages, regulations, tax structures, environmental compliance programs, etc), in other words, operating costs are higher in the EU

 

[Nekronos]

There’s a thing called corporate tax that corporations pay to the government. It won’t involve average individuals. Whether said corporation will pass on those taxes to consumers fully is another matter. Basically Apple relies on infrastructure provided by EU to operate in EU. Apple doesn’t own any country in EU zone outright.

How about this?

Of course tariff is an import tax on average consumers. That’s NOT corporate tax.

A tariff is essentially the same as corporate tax. A tariff is no more a tax on consumers than a corporate tax is.

A company will pass as much costs as they can onto consumers, be that taxes or otherwise. Money is fungible. Trying to say a company is passing its labor cost or manufacturing cost but not a tariff any other form of tax is nonsensical.

 

[Shirasaki]

I'm surprised I haven't seen much discussion on how it was also very likely the President Trump would have retaliated against the EU if this had happened.

By taxing his dwindling number of citizens. Sure.

 

[Shirasaki]

Congrats! Apple should stand up to EU tyranny more often.

Why you guys not lobbying Apple super hard to voluntarily leave this wicked land called EU and pull back global business? After all Apple is an American first company, right? Right?

 

[ikramerica]

wow. That’s a huge reversal.

This announcement came relatively quickly after Apple started their appeal:

Apple Challenges 'Unprecedented' €500M EU Fine Over App Store Steering Rules

Apple is appealing the 500 million euro ($570 million) fine that it is facing in the European Union for allegedly violating the Digital Markets...

www.macrumors.com

So you are giving credit to Apple here?

 

[Plutonius]

wow. That’s a huge reversal.

This announcement came relatively quickly after Apple started their appeal:

Apple Challenges 'Unprecedented' €500M EU Fine Over App Store Steering Rules

Apple is appealing the 500 million euro ($570 million) fine that it is facing in the European Union for allegedly violating the Digital Markets...

www.macrumors.com

Apple's appeals haven't worked in the past.

I think the turnaround has to do more with the tariff negotiations going on between the US and EU.

 

[ikramerica]

Wonder how this tax on discarded electronics will work. Sounds like a hard thing to police.

California has that. They just charge a fee on new stuff, and somehow that helps.

I think the fee pays for the ewaste collection centers and events, but I think underpants gnomes are the middlemen somewhere.