Finance

EU set to delay digital levy plans as G20 backs global tax deal

The EU is set to push back plans to introduce a levy on large internet companies, following the endorsement of a global corporate tax deal by finance ministers from the G20.

The deal will introduce a minimum global corporate tax rate of 15%. Ministers from the G20, which comprises 19 major economies plus the EU, backed the plan at a meeting over the weekend of 10 and 11 July.

The new scheme could affect the tax paid by major tech companies such as Google, Amazon and Facebook.

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The EU was also set to announce its plans for a new digital tax on the major tech giants some time in the week beginning 12 July, but has now pushed back its plans in the light of the global tax deal and in the face of lobbying from US officials.

“We have decided to put on hold our work on a proposal for a digital levy as a new EU own resource during this period,” An EU Commission spokesperson said.

US Treasury Secretary Janet Yellen called for the EU’s “discriminatory” digital tax plans to be shelved in light of the G20’s backing for the Organisation for Economic Co-operation and Development’s corporate tax plan.

“The agreement that we’ve reached in the OECD framework discussion calls on countries to agree to dismantle existing digital taxes that the United States has regarded as discriminatory and to refrain from erecting similar measures in the future,” Yellen said.

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“So it’s really up to the European Commission and the members of the European Union to decide how to proceed. But those countries have agreed to avoid putting in place in the future and to dismantle taxes that are discriminatory against US firms.”

Yellen is due to meet Eurozone finance ministers on 12 July following the G20 meeting in Venice the previous week.

To contact the author of this story with feedback or news, email James Booth

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