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The US is urging the EU to keep plans for digital companies, saying it could oppose Brussels’ promise to avoid new corporate taxes as negotiations on an international agreement come to an end.
The terms of the treaty were ratified by 130 countries in the OECD in Paris last week, after that win approval from the G7 summit last month.
U.S. and EU officials this week will discuss ahead of a G20 finance cabinet meeting in Venice on Friday; the future of the 27-member digital tribute is expected to be a major factor in the negotiations. Janet Yellen, US Secretary of Treasurer, is meeting with members of her eurogroup numbers in Brussels early next week.
Yellen spoke with the vice president of the European Commission on digital issues and competition Margrethe Vestager about tax ideas on Tuesday, according to the Commission, which it said was a “first positive and positive exchange”.
U.S. Treasury officials told reporters Tuesday that EU plans for digital currency may not be in line with the OECD and G7 agreements, although it is not possible to confirm whether they are in line until the final agreement is reached.
G20 finance ministers reviewed this week and discussed the first agreement in the OECD with the G7, the ultimate goal the agreement during the G20 summit in Italy in October, officials said.
But the EU’s plan to continue with its digital currency this month is at risk of transatlantic conflicts at the end of the negotiations.
EU officials have confirmed that the request will not be matched by the 2018 tax plan that paid the world’s largest arms manufacturing companies but was ultimately rejected by opposition countries. Instead, Brussels has said it will support hundreds of digital companies – instead of fighting US technology giants.
Valdis Dombrovskis, Vice-President of the EU Commission on Trade, said Tuesday that tax work is “continuing” and Brussels was confident it was not in conflict with the OECD agreement.
“We are working with our partners around the world to ensure that the conference does not disrupt the work of the OECD once the necessary agreement was reached. We see that this is a partnership because it works for a large company, “said Dombrovskis.
US Treasury officials say they are aware that the EU is in political turmoil because it has promised to bring in new currency this month, in conjunction with providing all the coronavirus-assisted loans.
The agency wants to allocate funds from digital to digital – as well as ways to increase its sales and climate change measures – to help pay for it. 800bn lenders will get it to establish its own revenues.
The commission is under intense pressure to keep up with funding from the European Parliament, which has previously called for Brussels to create its own financial resources.
Ursula von der Leyen, President of the Commission, emphasized last month that digital finance does not contradict global tax sentiments and does not result in companies being taxed twice as much on the same payroll.
Yet he seems to be showing that the council was willing to underestimate, based on the results of the global tax negotiations, and suggests that a “bigger solution” could be found in the OECD negotiations.
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