The United States is putting pressure on the European Union to shelve plans to levy taxes on digital companies, saying it may avoid the promise of new punitive corporate taxes when negotiations with Brussels on a landmark global tax agreement are being finalized. conflict.
Senior US and EU officials will hold talks this week before the G20 Finance Ministers meeting in Venice on Friday; it is expected that the fate of the 27-member EU’s proposed digital taxation will play an important role in the discussion. Early next week, US Treasury Secretary Janet Yellen (Janet Yellen) will meet her opposite member of the Eurogroup in Brussels early next week.
According to the European Commission, Yellen spoke with Margrethe Vestager, the European Commission’s vice-president for digital and competition policy, on the tax proposal on Tuesday, calling it “a good and constructive First exchange”.
A senior U.S. Treasury official told reporters on Tuesday that the EU’s digital taxation plan may be inconsistent with the agreement between the OECD and the Group of Seven, although it cannot be confirmed whether it is compatible until a final agreement is reached.
The G20 finance ministers will review and discuss the preliminary agreement reached between the OECD and the G7 later this week. Aim to end Officials said the agreement was reached before the G20 summit in Italy in October.
But the EU’s plan to implement its own digital tax as early as this month is likely to exacerbate transatlantic tensions in the final stages of negotiations.
EU officials emphasized that the proposal will not reflect the EU’s plan to impose taxes on the world’s largest technology companies in 2018, but it ultimately failed due to opposition from smaller member states. Instead, Brussels said it might target hundreds of companies with digital businesses, rather than specifically targeting US technology giants.
Valdis Dombrovskis, the European Commission’s Executive Vice President for Trade, said on Tuesday that the tax collection is “in progress” and Brussels believes this will not conflict with the OECD agreement.
“We are working with our international partners to ensure that tariffs do not interfere with the OECD process that has reached important agreements. We think this is complementary because it will cover a broad company base,” Dombrovskis said.
Senior U.S. Treasury officials said they are aware that the European Union is in a difficult political situation because it has pledged to announce a new digital tax before this month, while issuing collective debt to fund coronavirus relief measures.
The Commission hopes to distribute revenue from digital taxation — together with the expansion of its emissions trading program and its proposed carbon boundary adjustment mechanism — to help repay It will accumulate 800 billion euros of borrowing Implement its recovery fund.
The committee is under tremendous pressure to promote tax collection by the European Parliament, which has long believed that Brussels should develop its own sources of income.
Committee chair Ursula von der Leyen insisted last month that the digital tax does not conflict with the international corporate tax proposal and will not cause the company to be taxed twice for the same income.
However, she seems to imply that the committee is willing to seek compromises, depending on the outcome of global tax negotiations, and hinted that a “broader solution” may emerge in the OECD negotiations.