Corporate Tax

Yellen says EU digital tax deferral helps with international corporate tax deal

BRUSSELS – Finance Minister Janet Yellen thanked European officials for delaying work on a controversial digital services tax and said upcoming negotiations on a proposed global minimum corporate tax should clarify what levies may be allowed.

European Union officials said Monday that they would postpone plans for their proposed digital services tax until October, which Ms Yellen said she shared the recent deal reached by leaders of the Group of 20 Great Economies to set a minimum global corporate tax could be undermined by 15%.

“I think it gives us time to sort out the international agreement that we all support,” said Ms. Yellen after meeting EU officials and national leaders from some EU countries. “What exactly is allowed and what is not allowed is currently unclear,” she said, adding that there will be a lot of negotiations on such issues before October if the participants want to finalize the deal.

Ms. Yellen and other US officials said that if the EU digital tax is pursued, it could undermine the prospects for the global tax deal, just as President Biden faces the challenge of winning Congressional approval.

“This is a sensitive time in the US negotiations and I think it will avoid throwing anything into the negotiations that would be unclear and make our progress difficult,” said Ms. Yellen.

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