March 12, 2019 / 11:53 AM / 5 months ago

EU ditches digital tax plan, to work for global reform

FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 6, 2019. REUTERS/Yves Herman

BRUSSELS (Reuters) - European Union governments on Tuesday scrapped a plan to introduce an EU-wide digital tax as some states opposed it, the Romanian presidency of the EU said.

The move is likely to be welcomed by digital giants such as Alphabet Inc’s Google and Facebook who would have fallen under the scope of the envisaged 3 percent levy.

However they face similar taxes that EU states, such as France, Italy, Britain and Spain, are introducing at national level.

Speaking in a public session of a meeting of EU finance ministers, Romania’s Eugen Teodorovici said there was no agreement on the tax despite months of talks, as the bloc’s Nordic countries and Ireland kept opposing the reform.

He said ministers would now focus on trying to reach a common position for an overhaul of digital taxation at a global level by 2020, confirming a Reuters report last week.

Global reforms on tax matters have proven very hard to reach because of widely differing interests among top states.

The Organization for Economic Co-operation and Development (OECD), a club of mostly wealthy nations, is currently working on a global reform of digital taxation to narrow loopholes that allow large multinational firms to greatly cut their tax bills.

The EU will reopen its debate on possible tax measures in the bloc if the OECD’s planned reform is delayed, Teodorovici said.

Reporting by Francesco Guarascio; Editing by John Stonestreet and Alison Williams

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