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European Commission Postpones Digital Tax Bill

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The European Commission is delaying a legislative proposal for an EU tax on internet companies and other digital platforms, the so-called digital tax.

 

According to a spokesman, the daily EU board first awaits the further elaboration of the tax agreement that was reached this weekend in Venice among the twenty ‘richest’ countries, the G20, on a worldwide minimum profit tax. It is expected in October.

The committee was due to present legislative proposals for a European digital tax next week. However, that plan has now been shelved, the spokesman said. He did not comment on whether the decision was made due to pressure from the United States. US Treasury Secretary Janet Yellen, who is in Brussels on Monday for consultations with the euro countries (Eurogroup), has strongly criticized the European plans because, in her opinion, they mainly affect American companies.

The tax agreement of the G20 – the group of nineteen major industrialized countries plus the European Union – is based on a minimum rate of 15 percent. Furthermore, profits of large companies in countries where they are recorded may also be taxed.

Many internet companies such as the American Amazon or Chinese Alibaba now only pay tax in the country where the company is physically located. But, at the same time, they make a lot of money in other countries that miss out on tax revenue due to the outdated rules.

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