The European Union (EU) reported that work on the digital tax proposal has been halted to focus on the broader minimum global tax treaty.
EU Commission Spokesperson Daniel Ferrie stated that an agreement was reached for a more stable, sustainable and fair tax system at the G20 Summit held in Venice, Italy, and said, “The successful completion of the process requires all parties to create the ultimate driving force. During this period, we decided to stop our work on the EU’s own new project, the digital tax proposal.
Italian Economy and Finance Minister Daniele Franco announced on 10 July that they, as the G20 countries, had reached a very important agreement on the international tax regulation of multinational companies.
“LOW TAX RACE BETWEEN COUNTRIES WILL END”
Franco noted that he and his counterparts agreed that multinational companies should pay taxes where they operate and generate profits.
The Italian minister emphasized that they intend to put into effect the mechanisms they have agreed upon until the G20 Leaders’ Summit to be held at the end of October.
US Treasury Secretary Janet Yellen, on the other hand, said that the “Agreement will end the low tax race between countries” regarding the new tax mechanism that will allow countries to tax large and profitable multinational companies at a rate of at least 15 percent.