BRUSSELS—The European Union will delay its proposed digital levy, an EU spokesman Monday, after finance chiefs from the Group of 20 leading economies endorsed an overhaul of the rules for taxing international companies.
The EU has faced intense U.S. pressure to postpone any announcement until a deal among the G-20 can advance. The EU has “decided to put on hold our work on a proposal for a digital levy” until October, said a spokesman.
The EU’s announcement came as U.S. Treasury Secretary Janet Yellen met with European Commission Executive Vice President Valdis Dombrovskis in Brussels, where she is expected to discuss the tax deal and lobby against the proposed EU levy, which has been criticized as conflicting with the G-20 deal.
European officials had already indicated they would aim to ensure the EU’s digital levy wouldn’t undermine work on the global corporate minimum tax, indicating they would propose a low tax rate and structure it in a way to avoid discriminating against U.S. companies.
Any proposal would need the agreement of the bloc’s 27 countries, a process that is likely to be difficult and protracted. French officials have pushed for a digital tax but diplomats from other EU countries have recently said a proposal would likely be delayed.