EU drops plans for digital tax as pressure builds for global reform
The EU has scrapped plans to roll out a digital tax on tech giants due to opposition from several member states.
Romanian finance minister Eugen Teodorovici today told representatives of EU governments the plan has been axed as no agreement could be reached after months of talks, Reuters reported.
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Instead, the bloc will now focus on working towards a revamp of digital taxation at a global level, Teodorovici said.
The Organisation for Economic Cooperation and Development (OECD) is currently looking into an overhaul of global tax laws that would prevent tech firms from exploiting loopholes that allow them to pay low levels of corporation tax.
The comments will come as a relief to tech giants such as Facebook and Google, which would have been impacted by the three per cent tax. But individual states including the UK and France will continue to pursue plans for digital taxes at a national level.
Senior US Treasury official Chip Harter today slammed plans for unilateral national taxes, describing them as “ill-conceived”.
“The challenges facing the international tax system are just far broader than how to tax social media and search engines,” he told reporters, according to Reuters.
Instead, he said countries should pursue the international tax reforms outlined by the OECD.
Last week France confirmed it will roll out a three per cent levy on tech giants, which it defined as digital firms with global revenues of more than €750m (£646m).
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Harter described the proposals as “highly discriminatory against US businesses” and said the US is considering how to respond.
“The United States opposes any digital services tax proposals whether they be French or UK,” he added.