EU postpones planned digital tax

The fight for the international minimum tax for IT companies is entering the next round. The European Union wants to postpone its plans for an EU-wide digital tax until the summer break. According to the news magazine Der Spiegel from the top of the EU Commission, the decisive date is the finance ministers’ meeting of the 20 largest industrialized countries (G20) in Venice at the beginning of July.

Until then, it is clear whether an acceptable solution will be reached in the ongoing discussions in almost 140 countries on reforming global corporate taxation.

At the same time, the Commission wants to press ahead with its tax plans so that they can be presented quickly if the negotiations fail. “We will not do anything that could disrupt the international talks,” it said. At the beginning of 2020, the G20 announced that it would create a worldwide minimum taxation for international corporations. An internationally applicable tax should make it unattractive for corporations to flee to so-called tax havens.

Digital tax: BDI speaks a power word

The administration of US President Joe Biden recently criticized this and threatened retaliation against European digital taxes.

The Federation of German Industries (BDI) had warned against a European special route with the digital tax. “An additional, purely European levy would be counterproductive,” said Managing Director Joachim Lang. A uniform global tax system for corporate profits that takes into account the challenges of digitization is necessary.

The proposed directive proposed by the EU Commission for a European digital levy contradicts this goal. It would further fragment the international tax system and could lead to trade conflicts.