EU pauses digital tax plans

The European Union has put its online tax plans on ice as leaders around the world explore a global corporation tax.

At the weekend, G20 leaders agreed to a deal that would introduce a global minimum corporation tax for BigTech companies like Amazon and Microsoft.

Brussels is also reportedly pausing the digital tax following pressure from the US.

"We have decided to put on hold our work on our new digital levy," said European Commission spokesman Daniel Ferrie.

The EU plans were expected to be published towards the end of July.

The global deal would see technology giants pay taxes based on where they operate, rather than just where their headquarters are located.

In order for the global reform to pass, it’s been reported that 130 countries would need to back the deal.

"We need to put an end to corporations shifting capital income to low-tax jurisdictions, and to accounting gimmicks that allow them to avoid paying their fair share," said Janet Yellen, US treasury secretary, who was visiting Brussels.

Last month, G7 finance ministers agreed on reforms that would see multinational tech giants pay their ‘fair share of tax’ in the countries they operate in.

At a meeting in London, the group of nations decided on a global minimum rate that ensures multinationals at least 15 per cent tax in each country they do business in.

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