US Treasury Secretary Janet Yellen has welcomed the European Union's move to pause plans for a bloc-wide digital tax.
ADVERTISEMENTUS Treasury Secretary Janet Yellen has welcomed the European Union's move to pause plans for a bloc-wide digital tax.
Brussels said on Monday it is halting plans for the levy, which would target tech giants like Amazon, Facebook and Google.
It came after pressure from the US who believe the EU tax complicates a separate deal to reform the international tax system has been struck.
First agreed by the G7, it includes plans to redistribute taxing rights and set a global minimum tax rate of 15 per cent for corporations.
Yellen, speaking to reporters during a three-day trip to Brussels, said she was “pleased” the EU agreed to pause its digital tax plans.
It avoided "throwing something into the negotiations that would be unclear and could complicate our progress”, she said.
Yellen said she was confident that three countries -- Ireland, Estonia and Hungary -- who’ve yet to agree to the minimum rate would eventually sign up.
“I did talk to the finance minister of Ireland and I met with both the president and the finance minister now of Estonia," she said.
"My message is that this is an agreement that is historic and very much in the interest of all countries. And it's important that everyone tries to get on board.
“Obviously, it involves compromises. And, you know, my sense is that those countries want to find a way to get to ‘yes’.”
While it's clear Yellen got what she came to achieve by persuading the EU to halt the digital tax, EU chiefs were seemingly happy to oblige.
“We agreed with Secretary Yellen to work together, the US and the [European] Commission, to make this agreement [15 per cent global minimum tax rate for corporations]possible because it is very important after such a crisis to have an important agreement on this issue,” the EU's economy commissioner Paolo Gentiloni told journalists on Monday.
In addition, Brussels is still appreciative of the Biden administration's spirit of cooperation on issues of mutual concern - after four years of difficulty from the Trump administration.
“We could say that in terms of our relationships with the US we have gone from a winter of discontent to a summer of cooperation,” said Gentiloni.