European Commission weighs broad levy on large corporations to sidestep US tariff threats

The European Commission needs new money for its next long-term budget. It would also like to avoid a tariff war with Washington.

What Brussels is considering

The Commission is deliberating a charge on all large companies with annual EU revenues above €100 million. Sector would not matter.

The levy would reportedly take the form of a lump-sum contribution. It would not be a tax tailored to digital services, online platforms or any other single industry.

The goal is to create new revenue streams for the EU budget. Those discussions are tied to talks over the 2028–2034 Multiannual Financial Framework, the bloc’s seven-year spending plan.

The idea surfaced in discussions reported on October 7, 2026. No formal proposal has been tabled yet, so this remains a plan under consideration rather than a done deal.

The Washington problem

The reason for the design is fairly transparent. The Trump administration has threatened tariffs of up to 100% on countries that impose digital services taxes, known as DSTs.

A DST is essentially a levy on revenue earned from online activities like advertising, marketplaces and user data. Because the largest players in those markets are US companies, Washington has long treated such taxes as targeted at American firms.

Some EU member states remain hesitant, reportedly because of sensitivities around US interests and the risk of backlash.

The crypto angle and the revenue gap

Estimates for what new EU-level taxes might raise vary widely. The European Parliament has put forward figures suggesting that new digital taxes, including provisions covering online gambling and crypto-assets, might bring in approximately €25.2 billion per year.

That is far above the Commission’s own estimate of €5 billion. Over a seven-year budget cycle, the Parliament’s numbers would imply around €175 billion in projected revenue.

For the digital asset industry, the inclusion of crypto-assets in the Parliament’s thinking signals that lawmakers view the sector as a potential revenue source for Brussels itself, not only as a market to regulate.

How we got here

Brussels has been down this road before. The EU proposed a targeted digital services tax in 2018 but shelved it to give priority to negotiations at the OECD.

Those global talks, known as Pillar 1, were meant to reallocate taxing rights over large multinationals so that profits get taxed where customers are. They have since stalled.

In the meantime, several member states moved ahead with their own national DSTs. The result is a patchwork, with some countries taxing digital revenue and others waiting for a global deal that keeps not arriving.

What this means

For large companies operating in Europe, the key shift is scope. A DST would have hit a relatively narrow group of digital businesses. A sector-neutral levy above €100 million in EU revenue would reach far more firms across manufacturing, retail, finance and tech.

The trans-Atlantic risk has not disappeared. A levy designed to avoid singling out US groups could still be read in Washington as a DST under a different name. With tariffs of up to 100% on the table, member states that are already hesitant may push to dilute or delay the plan.

The timeline to watch is year-end 2026. A decision on EU-level measures is anticipated by then, in step with the budget negotiations.