Europe

Vestager: EU Should Proceed With No-Deal Digital Tax

European Union

In a move that increases pressure on multinationals, European Union commissioners-designate said the bloc should come to an agreement on a digital tax if a deal doesn’t happen at a worldwide level by the conclusion of 2020. The incoming commissioners also noted their priorities on the bloc’s financial reforms and fiscal rules in written answers to lawmakers that were published, Reuters reported.

The new commissioners are set to come into office in November following the approval from EU lawmakers in hearings that start in the week to come. Moves to change corporate taxation to reflect the profits that digital multinationals take in have not been able to yield results as separate nations have varying tax approaches. 

Margrethe Vestager, the incoming commission’s vice president, said per the report, “If no effective agreement can be reached by the end of 2020, the EU should be willing to act alone.” Paolo Gentiloni, the commissioner-designate for taxation, mirrored her comments. He would aim to prevent separate bloc governments from having the ability to nix tax decisions. (Some EU states were against a bloc-wide agreement on the digital tax in 2018.)

In separate news, the new European Commission (EC) had reappointed Vestager as antitrust chief in what some had referred to as a surprise move. Her term was expected to end with elections for the European Parliament and the new European Commission taking office. Vestager is widely seen as a strict and meticulous enforcer who has taken on Big Tech companies without fear. She has reportedly put harsh penalties on them as well as taking them to task for perceived abuses of power. 

The official will also reportedly take on a new initiative involving Europe and the digital age. Particulars of that endeavor were not released, however, per reports. “Digitalization has a huge impact on the way we live, work, and communicate,” European Commission President-Elect Ursula von der Leyen said about Vestager’s role. “In some fields, Europe has to catch up — like for business to consumers — while in others we are frontrunners — such as in business to business.”

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