The European Commission pushes back its digital tax project to October

European Commission pushes back

To make way for the project validated by the G20, and under pressure from the United States, the European Commission has agreed to put its proposal for an EU-wide digital tax on hold.

In July 2021, the European Commission was to publish a bill on the taxation of digital giants. This has been postponed to next October, we learned on July 12.

The intervention of the United States

”  The success of this process will require a final effort from all parties, and the Commission is committed to focusing on this effort,  ” said a spokesperson for the European Commission.

But it is in fact under pressure from the United States that Europe is backing down and suspending its work in this area for the moment. Janet Yellen, Secretary of the US Treasury, was in Brussels to negotiate with US finance ministers.

The tax mainly targets the American digital giants. This is why Washington, which strongly criticized the EU project and threatened Europeans with reprisals with new customs barriers, believes that this initiative threatens discussions of a tax at international level, currently under study by the G20 and the OECD.

Several proposals already rejected

As a reminder, the European Union’s project aims to harmonize the tax taxation of multinationals in the digital economy in order to prevent them from declaring the majority of their income in countries with particularly advantageous taxation, such as ‘Ireland, Luxembourg, or the Netherlands.

In 2018 for example, it is estimated that Google generated around two billion euros in advertising revenue in France, while only
411 million euros were declared in France that year, for only 17 million euros. taxation. By limiting their physical presence in countries, digital players manage to evade taxes.

Many proposals have emerged in an attempt to tax precisely these multinationals. The idea of ​​a tax of 3% of the turnover (instead of profits) of certain activities such as online advertising or the sale of personal data was notably raised, then rejected, hence the waiting for the new proposal which was to arrive in the next few days.

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