After Washington’s intervention, Brussels capitulates and postpones significant plans.
BRUSSELS has abandoned plans for a contentious tax on internet behemoths, citing strong pressure from Washington to do so.
The European Commission announced Monday that any such step would be postponed until the autumn. It comes as US Treasury Secretary Janet Yellen flew into Brussels for candid talks with her European counterparts. She also requested that Hungary, Ireland, and Estonia abandon their resistance to a worldwide tax reform agreement that would levy a minimum tax on multinational firms.
On Monday, Ms. Yellen met with Eurozone finance ministers to discuss the concerns as well as ways to strengthen transatlantic ties.
She hailed the EU’s “decisive and extraordinary” reaction to the economic catastrophe brought on by the coronavirus outbreak.
However, she cautioned that the bloc’s efforts had not gone far enough.
Ms. Yellen underlined that EU countries should “seriously explore extra fiscal measures” to ensure a strong domestic and global recovery.
She also urged the EU to provide countries with “adequate freedom” to respond to future crises.
Her clout appeared to be enough to persuade Brussels to abandon plans to impose a digital-industry charge across the EU.
The Commission indicated that it will put the plans on hold for the time being in order to focus on a worldwide tax agreement.
According to a spokeswoman, “successfully finishing this process will need a last effort from all parties, and the Commission is dedicated to focusing on that effort.”
“As a result, we have agreed to focus our efforts during this period on a proposal for a digital level as a new EU own resource.”
Taxation of digital businesses is poised to become a contentious issue in Brussels for a variety of reasons.
It will be used to assist repay payments given out by the EU’s coronavirus recovery fund to pandemic-affected companies and regions.
However, several low-tax countries, such as Ireland, have warned that it might have a considerable impact on international investment.
Brussels had anticipated to publish its digital levy plans this week before the delay.
“The Commission is considering how to support the historic G20 deal,” an official told the Financial Times over the weekend.
“In that context, we are considering deferring the details proposal on the digital tax to the autumn.”
The EU’s intentions, according to Washington, would have clashed with a worldwide minimum level deal. “Brinkwire News in Condensed Form.”