In a paper obtained by POLITICO, the U.S. Joe Biden administration stated that the EU's planned digital levy could derail international negotiations to reform global corporate tax rules.Two officials confirmed that Washington had sent the nonpaper to EU diplomats days before the start of global tax negotiations at the Organization for Economic Cooperation and Development. AFP first reported the U.S. paper on Wednesday.OECD talks are aiming to reach a political agreement on taxing the 100 largest companies in the world and setting a global corporate minimum tax rate of 15%. In a few weeks, the G20 countries will approve the agreement. Washington will only sign the agreement if the other countries remove their national tech taxes, which includes EU initiatives.Even though it is different than previous digital service taxes, the EU Digital Levy threatens the work of the OECD/G20 process. The U.S. document stated that the EU Digital Levy was not only disruptive but also a threat to the work being done via the OECD/G20 process. We ask you to join the European Council, and the European Commission in order to delay the publication of the EU Digital Levy plan.In mid-July, the Commission plans to propose the initiative as a way to repay the money it will raise to pay for the EUs 750 billion recovery funds. Washington has been assured by officials from the Commission that the soft tax will not lead to double taxes or discrimination against U.S.-based tech companies.The repeated statements by the EU that it intends to ensure its digital tax complements multilateral consensus solutions are a great sign, as the U.S. paper stated. This complementarity can only be achieved if the OECD/G20 Inclusive framework consensus is reached before the EU proposes the levy.POLITICOPOLITICO
