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EU to Put on Hold Digital Levy Following G-20 Minimum Tax Plans

EU to Put on Hold Digital Levy Following G-20 Minimum Tax Plans

BRUSSELS—The European Union is putting on hold a proposed digital levy, an EU spokesman said Monday, after finance chiefs from the Group of 20 leading economies endorsed an overhaul of the rules for taxing international companies.

The EU has faced intense U.S. pressure to postpone any announcement until a deal among the G-20 can advance. The EU’s executive arm, the European Commission, has “decided to put on hold our work on a proposal for a digital levy” until October, said the spokesman. A proposal was expected later this month.

The EU’s announcement came after U.S. Treasury Secretary Janet Yellen arrived in Brussels for meetings with EU finance ministers and Commission officials, where she is expected to discuss the tax deal and lobby against the proposed EU levy, which has been criticized as conflicting with the G-20 deal.

European officials had already indicated they would aim to ensure the EU’s digital levy wouldn’t undermine work on the global corporate minimum tax, indicating they would propose a low tax rate and structure it in a way to avoid discriminating against U.S. companies.

Still, by delaying the Commission’s proposal, the EU maintains some leverage if negotiations over how to implement the minimum corporate tax agreement fail.

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