The European Commission (EC) will postpone the plan to introduce a digital tax as an additional source of revenue. This was stated by a spokesperson at a press conference in Brussels today. The Commission originally wanted to present the proposal this month.
The announcement came after Sunday’s review of the EU’s plan to tax large Internet companies, which mostly come from the United States, was called by US Treasury Secretary Janet Yellen, who is attending a meeting of euro finance ministers in Brussels today. Some EU leaders question the meaning of the European digital tax after a major global corporate tax reform was agreed on Saturday by the world’s largest G20 economies.
“We have decided to suspend work on our new digital tax as the EU’s new own resource,” EC spokesman Daniel Ferrie told a news conference in Brussels, adding that the European Union would reassess the situation in the autumn.
Asked if the postponement of the digital tax was possible, EU Economic Commissioner Paolo Gentiloni said that the EU’s priority was to implement the G20 agreement. The G20 states agreed on Saturday that multinational companies will have to tax profits where they originated, and not through subsidiaries in more tax-friendly countries. In addition, a uniform minimum rate of 15% should apply. It is not yet clear when this agreement will come into force.
The European Commission has long sought to increase the taxation of large digital businesses. Some of its member countries, including the Czech Republic, have decided not to wait for a pan-European tax and have prepared a proposal for their own digital tax. France has even introduced three percent of its profits and started enforcing it. The US considers the digital tax to be discriminatory and has considered introducing retaliatory duties because of it.