(Bloomberg) -- The European Union said Monday that it would postpone its push for a digital levy to focus on a broader deal for a minimum global tax deal struck by the world’s largest economies.
The EU’s levy plan had been strongly criticized and U.S. Treasury Secretary Janet Yellen was meeting with EU officials in Brussels on Monday to lobby against the proposal.
The European Commission, the EU’s executive arm, had already delayed the rollout of the plan amid pressure to withdraw it or show that it’s compatible with the global effort on how and where to tax the profits of multinational companies.
“We have decided to put on hold our work on a proposal for a digital levy as a new EU own-resource during this period,” said Daniel Ferrie, a spokesman for the European Commission.
G-20 Deal
Over the weekend, the Group of 20 nations endorsed the principles of a global corporate-tax agreement. The deal is designed to stop major corporations from moving to low-tax jurisdictions and to establish a fairer system for distributing the taxation rights on multinationals, based on where they operate instead of where they are headquartered.
The latter component also includes an agreement to end so-called digital services taxes that several European countries have implemented to target the revenues of large tech companies like Facebook Inc (NASDAQ:FB). and Alphabet (NASDAQ:GOOGL) Inc.’s Google.
The Treasury Secretary was set to meet with the euro-area finance ministers collectively Monday, and was also set to have separate meetings with European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen and EU trade chief Valdis Dombrovskis, among others.
The EU said it will reassess its interest in a digital levy in the fall after further discussions on the glocal tax deal.
“To conclude this process we want to concentrate all of our efforts on getting that over the line and for that reason we are putting a hold on our work on a digital levy,” Ferrie said.