EU pauses digital tax plan

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If implemented, this would put an end to multinational corporations shifting profits to low-tax heavens around the world…reports Asian Lite News.

The European Commission (EC) said that it will delay a corporate tax plan for the European Union (EU) in a bid to facilitate the broader global tax deal.

“We have decided to put on hold our work on our new digital levy,” the commission’s spokesman for taxation and customs, Daniel Ferrie told a daily briefing on Monday, adding that the bloc will re-assess the situation in autumn.

The G20 Finance Ministers on July 10 agreed to go ahead with the plan to design a global tax system that would impose a minimum levy on multinational companies, reports Xinhua news agency.

If implemented, this would put an end to multinational corporations shifting profits to low-tax heavens around the world.

“This was an extraordinary result after years and years of negotiations for which the EU Commission has worked tirelessly,” said Ferrie when asked to comment on the development.

“Successfully concluding this process will require a final effort by all parties and the Commission will focusing on this effort,” he added.

The idea to levy a digital tax by the EU had been floated in September 2020, when European Commission President Ursula von der Leyen announced the initiative in her State of the Union speech.

A month later, the European Commission published its work program for 2021 where it announced a legislative proposal on the digital levy.

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