Yellen to Press Europe on Digital Tax Plan Following G-20 Accord

U.S. Treasury Secretary Janet Yellen will press European Union officials in Brussels this week to reconsider their plan to propose a digital levy after securing the Group of Twenty’s endorsement for the principles of a global corporate-tax agreement. Yellen is in Brussels Monday and Tuesday following the gathering of G-20 finance ministers and central bankers in Venice, which concluded Saturday with the group’s call to finish work on the global plan’s details by October.

The Treasury chief is set to make the case for the EU to hold off on unveiling its plan for a bloc-wide digital levy on online sales. The European Commission, the EU’s executive arm, has delayed the rollout until July 20 amid pressure to withdraw it or show that it’s compatible with the global effort on how and where to tax the profits of multinational companies.

Some European officials are considering a further postponement of any digital-levy proposal until the fall, according to people familiar with the plans. Asked Sunday if the planned levy would violate the global deal, Yellen avoided a direct answer but signaled the U.S. is not satisfied with the EU’s justification for it.

The global deal is designed to stop major corporations from moving to low-tax jurisdictions and to establish a fairer system for distributing the taxation rights on multinationals, based on where they operate instead of where they are headquartered. The Treasury Secretary is set to meet with the European Union finance ministers collectively Monday, and will also have separate meetings with European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen and EU trade chief Valdis Dombrovskis, among others.

Yellen to Press Europe on Digital Tax Plan Following G-20 Accord, Bloomberg, Jul 12