Brussels (Brussels Morning) The European Commission is to delay its planned tax on digital services as it considers objections by the US against such taxes on national levels.
The US is concerned that the EU plan, which was to have been proposed later this month, could jeopardise efforts to introduce a global minimum corporate tax, Reuters reported on Monday.
One EC official warned that the new digital tax could undermine plans for a global minimum corporate tax.
Speaking at a press conference in Brussels, EC spokesman Daniel Ferrie acknowledged “we have decided to put on hold our work on our new digital levy”. He said the Commission would re-evaluate the situation in the autumn.
After the G20 agreed on Saturday to support a reform of global tax rules, some EU officials criticised EC’s plan to introduce a tax at the bloc level.
Commenting on the possible delay of the EU tax, European Commissioner for Economy Paolo Gentiloni noted on Saturday that the bloc’s focus is on the implementation of the G20 agreement.
EC committed to G20 deal
Ferrie pointed out that wrapping up the global tax agreement “will require a final effort from all parties”, and that the Commission is committed that effort.
Details of the deal should be hammered out in October this year, after which the final proposal would have to be approved at national levels.
Prior to a meeting between US Secretary of the Treasury Janet Yellen and EC President Ursula von der Leyen in Brussels on Monday, a source close to the EU indicated that Yellen’s priority is to stop the EU’s new digital tax.
The EU had been planning its digital tax for years and wanted to push the proposal this month in order to counterbalance a surge in spending intended to help EU member states recover more quickly from the coronavirus crisis.