EU has ‘put on hold’ digital levy says spokesman
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Speaking on Monday, Daniel Ferrie, spokesman for the European Commission explained how Brussels has pushed back the date for the introduction of a European Union-wide digital levy on companies. The bloc decided to scrap plans for the controversial tax on digital giants after pressure from Washington to bin the proposals. Before the delay, Brussels had hoped to publish proposals for a digital levy this week. But Ireland, Hungary, and Estonia have consistently kicked back against the plans through fears it could have a serious impact on foreign investment into their countries.
Mr Ferrie said: “In Venice, the G20 endorsed a historic agreement to create a more stable, fairer international tax system.
“Which addresses the tax challenges that arrive from the digitalisation of the economy.
“This was an extraordinary result after years and years of negotiations.
“And one for which the Commission has worked tirelessly.
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“For this reason, 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.”
EU Economic Commissioner Paolo Gentiloni insisted the push back will give the bloc more time to plan for their federalisation.
He said: “Postponing the bloc’s plan will make it easier to concentrate on achieving the last mile of the global deal.”
The plans will see tax gathered from large companies such as Google and Amazon which will be used to help repay the grants handed out to pandemic-stricken industries and regions through the bloc’s coronavirus recovery fund.
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But Ireland, Hungary, and Estonia have repeatedly warned the bloc the plans will damage their economies.
Ireland’s corporation tax is one of the lowest in Europe at 12.5 percent meaning it is attractive for companies such as Google and Amazon.
But the federalisation plans would scupper this attractiveness.
US Treasury Secretary Janet Yellen flew to Brussels with EU counterparts where she demanded that Hungary, Ireland, and Estonia drop their opposition to a global tax reform deal that would impose a minimum levy on multinational corporations.
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The move comes after years of repeated failed efforts by the European Union to fix taxation rules across the bloc.
In 2011, the European Commission said the EU should try to unify what they tax, rather than how much, in a proposal called the Common Corporate Consolidated Tax Base (CCCTB).
But the proposal backfired spectacularly because member states said it was an attempt by the EU to start having a say as well as attempting to control their national tax policies.
Ireland, the Netherlands and Luxembourg have for years fought to defend their right to keep low taxation rates for their citizens, as a result, the bloc has been left failing to deliver a one size fits all policy for member states.
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