EU on digital tax

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Member nations of the European Union have shelved a plan to tax IT giants like Google based on revenue.

The European Commission proposed a temporary measure last March to impose a 3-percent levy on revenues made by major IT firms in the EU.

The plan was suggested as a way to tax the companies more fairly on profits they make on cross-border business.

Google and Facebook are among the firms said to benefit from the current system. Some EU members also believe the regulations don’t do enough to discourage tax evasion.

But on Tuesday the proposal was abandoned after member nations couldn’t reach an agreement.

Countries like Ireland were against it because the lower tax rates have helped them lure big IT firms.

Some members like the UK and France say they will introduce their own levies.

A US Treasury Department official called the proposed EU tax highly discriminatory against US-based multinational businesses.

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