As a gesture of goodwill towards the US, the European Union has put work on the digital tax levy plans on hold for the time being to focus on implementing the historic tax decision approved by G20 finance ministers on Saturday.
The EU hopes that this will make it easier to overcome political and technical hurdles in implementation.
The EU Commissioner for Economic and Monetary Affairs, Paolo Gentiloni, explained: “We will work together to achieve this global deal. I informed Finance Minister Yellen of our decision to suspend the EU Commission’s proposal for a digital levy so we can focus on working hand in hand to cover the last mile to achieve this historic agreement. “‘
The German Finance Minister Olaf Scholz is also more focused on the global corporate taxation measures that have been adopted than on the EU plans for digital taxation: “The most important step is that we have an agreement on a global minimum tax and that we also have an agreement on how to better tax large, highly profitable companies, including those that operate as global digital giants.”
Negotiating finals in Rome
The finance ministers of the 20 most important economies agreed on a global minimum corporate tax of 15 percent on Saturday. A measure that aims to set a floor on tax rates and discourage companies from using low-tax countries as tax havens.
The details are expected to be worked out by the OECD in the coming weeks, followed by a final approval by the G20 presidents and heads of government at a meeting in Rome on October 30th and 31st.
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