The United States wants to overthrow EU plans for a digital tax

The US government has urged the EU to postpone a planned plan for a European tax on digital companies until mid-July. Washington pointed out in a document submitted to the AFP news agency on Wednesday that such plans could “affect” international negotiations on a global minimum corporate tax. According to diplomats, the letter was sent to only a few EU capitals.

These governments should be prevented from submitting the plan for the European digital tax on July 14 as planned by the EU Commission. The German federal government and other capitals are urged to comply with other EU member states and the Commission. The timing of the commission’s proposal risks “completely derailing” international negotiations.

The ambassadors told AFP that the US initiative to postpone the commission’s proposal was aimed at Germany, the Netherlands and other northern European countries. The target is countries that have already blocked an earlier plan for a European digital tax.

Negotiations on a global minimum tax are currently underway between the Organization for Economic Co-operation and Development (OECD) and the G20 states. Tough negotiations began in May after the United States proposed a tax rate of at least 15 percent. German Finance Minister Olaf Scholes (SPD) has expressed confidence that progress can now be made at an international level.

The United States is very skeptical of the EU’s plans for a digital tax and has responded with penalties to a national digital tax in France. Because practically all the big companies in this area are from the United States.

The EU insists its plans will affect not only US companies but also thousands of companies. The US letter, however, indicated that “important interest groups” would describe the move as a “unilateral move” before reaching a final agreement at the OECD and G20 levels. The aim is to achieve this by October.