Brussels postpones tax on tech companies

Brussels postpones tax on tech companies

The European Commission introduces a tax bill to internet companies such as Amazon and Google. First, Brussels is awaiting further elaboration of an international tax agreement. This agreement should result in a minimum worldwide dividend tax, which also applies to large tech companies.

fierce American criticism

The committee is due to present legislative proposals for a European digital tax next week. This plan has been postponed until the fall. US Treasury Secretary Janet Yellen, who was a guest in Brussels on Monday, sharply criticized the European plans because, she says, they mainly affect US companies.

On Saturday, the rich nations of the Group of 20 agreed to an intention to impose a tax of at least 15 percent on corporate profits. Earlier, the Group of Seven major industrial countries and 130 countries in the Organization for Economic Cooperation and Development supported the tax reform initiated by the United States.

There are still exceptions, such as Ireland, Hungary and Estonia, and Yellen tries to convince them of the importance of the agreement. “There must be an end to the diversion of capital income by companies into tax havens, and to accounting tricks that prevent them from paying their fair share,” she said.

Ireland commits to a lower profit tax

During a Monday breakfast in Brussels, Yellen wanted to take fellow Irishman Paschal Donohue on the plane. without success. Ireland is open to changes in the way multinational corporations are taxed, but is sticking to the low corporate income tax rate of 12.5 per cent to attract businesses. Minister Donohue said the talks would continue under the leadership of the Organization for Economic Co-operation and Development, the club of rich nations.

The international tax plan consists of two pillars. The first pillar is that companies pay taxes in the countries in which they sell their products or services. The second pillar is the minimum income tax. Taken together, this should ensure that multinational companies pay more taxes in more countries. For this it is necessary that the parliaments of the participating countries agree

Yellen has yet to implement his country’s tax plans. As for the US Congress, it expects the second pillar, 15 percent, to be incorporated into the regular budget bill later this year. But a corporate tax plan depending on where you operate will take more time. “The details of the first pillar have not yet been negotiated,” she said. It remains to be seen whether this requires a two-thirds majority in the Senate. If so, Democrats and Republicans should embrace the plans.

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