May 14, 2020 / 2:32 PM / 21 days ago

UPDATE 1-Czech finance minister may delay digital tax, plans 5% rate

(Adds finance minister’s quote, details)

PRAGUE, May 14 (Reuters) - Czech Finance Minister Alena Schillerova may delay the introduction of a digital tax aimed at global internet giants until next year, and lower the rate to 5% from a currently proposed 7%, she said in a televised interview on Thursday.

Postponing the introduction of the tax could mean the Czechs benefit from an international solution, being discussed among European Union powers and members of the OECD, Schillerova said.

“The digital tax will definitely happen, I am more inclined to postpone it until January 2021. I also lean towards cutting the rate to 5% from 7%,” Schillerova told public television.

The U.S. embassy in Prague said in January that the Czech Republic could face counter-measures if it presses ahead with the tax on big tech companies’ local revenues from targeted advertising, digital marketplace provision and user data sales.

Nearly 140 countries are negotiating the first major rewriting of international tax rules in more than a generation, to take better account of the rise of internet giants like that often book profit in low-tax countries. The United States fears such a change will disproportionately affect American companies like Amazon or Facebook.

Past attempts to create an EU-wide digital tax have failed in the face of opposition from Ireland, where many big U.S. tech companies book profits, and some Nordic countries.

Reporting by Robert Muller; Editing by Hugh Lawson and Catherine Evans

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