EU suspends digital tax bill under US pressure technology

EU suspends digital tax bill under US pressure  technology

The European Commission will postpone its plans to propose a new tax on digital services in July, a spokesman said on Monday (12) after intense pressure from the US government.

The decision was taken during talks on reforming the taxation of multinational companies, which comes under the purview of the Organization for Economic Co-operation and Development (OECD) and should end in October.

“The success of this process will require the last effort from all parties, and the Commission remains committed to focusing this effort. That’s why we have decided to stop our work on the digital tax proposal“, the spokesman for the European Commission announced.

  • know more: Analysts say new tax announced by rich countries for multinationals is not enough

The EU’s digital tax bill was highlighted as one of the new resources for a 750 billion euro stimulus package.

Although it has yet to be made public, the European Commission has insisted that its bill to tax digital companies would comply with OECD agreements and affect thousands of companies, including European ones.

However, the proposal attracted criticism from the US government.

Washington considers the project like discriminatory to US technology giants heroine, Google I Facebook.

US Treasury Secretary Janet Yellen, who was in Brussels on Monday for a meeting with European Finance Ministers (Eurogroup), asked the European Union on Sunday to reconsider the matter.

On Saturday (10), G20 finance ministers approved a reform considered “revolutionary” aimed at eliminating the tax haven.

In a special way, intends to impose a world tax of at least 15% on the profits of the largest international companies And distribute the rights to tax these companies more equitably.

The details of this reform are yet to be negotiated within the OECD by October. applicable from 2023.

Yellen said on the sidelines of the G20 in Venice on Sunday, the “agreement approved by the G20 on Saturday” calls on countries to agree to an end to existing digital taxes, which the United States considers discriminatory and similar ones in future. Avoids setting up measures. .

“It is therefore up to the European Commission and the members of the European Union to decide the way forward,” she said.

The agreement reached at the G20 generated enthusiastic reactions, including in Brussels.

European Commissioner Paolo Gentiloni said on Saturday: “A bold step has been taken, which some believed was possible a few months ago. It is a victory for fiscal justice, social justice and the multilateral system.”

“But our work is not over. We have until October to finalize this agreement,” he warned.

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About the author: Sarah Gracie

"Proud social media buff. Unapologetic web scholar. Internet guru. Lifelong music junkie. Travel specialist."

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