The European Union (EU) was expected to abandon efforts to create a digital tax for the bloc, instead focusing on a global tax system for tech companies, Reuters reported.
Its original plan would have required large companies in the EU to pay a 3 per cent levy on revenue generated from the sale of user data, online marketplaces and targeted advertising. However, it was blocked by the Republic of Ireland and Scandinavian countries, which feared a loss of revenue and political backlash.
“A number of delegations continue to have fundamental objections,” the Romanian presidency of the EU wrote in a document prepared ahead of a meeting of EU finance ministers meeting on 12 March, which was seen by Reuters.
Countries including France, Italy and Spain, which were in favour of the tax, have introduced it on a national level.
The EU’s decision is likely to be welcomed by tech giants including Google and Facebook, Reuters stated.
Meanwhile EU ministers are expected to agree to keep working on a global tax reform prepared by the Organisation for Economic Cooperation and Development.
Earlier this week the Council of the European Union primed rules to scrutinise direct investments, including takeover proposals from countries outside the region on the grounds of security or public order.Subscribe to our daily newsletter Back