EU greenlights only half of global tax deal

European Union flags flutter outside the European Commission headquarters in Brussels
EU flags flutter outside the European Commission headquarters in Brussels, Belgium, August 21, 2020. REUTERS/Yves Herman

BRUSSELS, Dec 16 (Reuters Breakingviews) - The European Union has at last found unanimity on the global minimum tax, half of an almost 140-nation pact to clamp down on global tax avoidance. Hungary finally dropped its veto this week, only for Poland to provide last-minute drama before finally allowing the EU to proceed. Whack-a-mole objections have become EU routine on tax matters, which require the unanimity of the 27 member states.

The other half of the global deal, struck under the Organisation for Economic Co-operation and Development auspices in 2021, concerned big digital services companies. The aim was to make tech giants like Google, Microsoft (MSFT.O) and Apple (AAPL.O) pay a fairer amount of taxes on their profits, regardless of where they are booked. Here the EU is nowhere close to an agreement, and seems headed for a bigger fight.

In the meantime, trade wars over a hodgepodge of national digital services taxes are likely to continue. The U.S. suspended its trade complaints against the UK, France, Austria, Italy and the Czech Republic after the OECD deal. Those battles may have to resume before governments feel motivated enough to make more progress. (By Rebecca Christie)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

Editing by Pierre Briancon and Streisand Neto

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