Taxation of Digital Services in the Context of Freedom to Provide Services

The presented paper is dedicated to the taxation of digital services in the light of one of the basic freedoms of the European internal market, namely the freedom to provide services according to Art. 56 of the Treaty on the Functioning of the European Union. The taxation of digital services is currently characterized by the application of uncoordinated unilateral mechanisms by individual States, most often in the form of a digital services tax (DST). The author first provides a categorization of these unilateral mechanisms, especially in the field of direct and indirect taxes, and then considers the so-called "other unilateral mechanisms" consisting of inter alia special procedural legal institutes (e.g. the obligation of the digital platform as an intermediary to withhold tax). Subsequently, the author provides an overview of the interpretation of the provisions of Art. 56 of the Treaty on the Functioning of the European Union in three cases discussed by the Court of Justice of the European Union concerning unilateral mechanisms of taxation of digital services.