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Margrethe Vestager, European Commissioner for a Europe Fit for the Digital Age, talks at a press conference about a competition sector investigation at the EU headquarters in Brussels, Belgium. The date is June 9, 2021. Pool/John Thys courtesy of REUTERS Reuters, RUSSELS, July 2 – The European Commission will propose a digital charge in the coming weeks to support its recovery from the COVID-19 outbreak, which will affect hundreds of enterprises, the bulk of which are European, according to its executive vice-president Margrethe Vestager. Last year, the 27 European Union countries decided to collectively borrow 750 billion euros ($887 billion) for a post-pandemic recovery fund in order to boost GDP and build a greener, more digital economy. The loan will be returned over 30 years by new taxes, including charges on the digital economy and CO2 emissions, by the European Commission on behalf of EU governments. Vestager praised the OECD agreement reached on Thursday on new rules on where corporations are taxed and a tax rate of at least 15%, but she said the EU will move through with its digital charge, though she did not specify how much it would cost. “If we can have this completely accepted and implemented, and tax authorities have the capacity to really claim the taxes,” she told Reuters, “then some of the corporations that currently pay very little or no taxes will contribute in the societies where they do business.” She explained that the EU digital levy had different goals than the OECD tax treaty, and that the levy’s reach was also different “It is a levy, not a tax, because it is so much broader.”” Whereas the OECD agreement only applies to the top 100 corporations, this deal applies to a much larger number of businesses “She went on to say that the fee would mostly harm European businesses, but that it would also effect others. “I recognize that, whatever you name it, it’s a cost for a firm,” she said, adding that it should be considered a standard expense of doing business in Europe. She refused to say which companies would be affected or how much the charge would cost. The date for the announcement has been tentatively planned for July 14. (1 dollar = 0.8454 euros) Foo Yun Chee contributed reporting, while Edmund Blair edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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