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The European Commission has backed away from its plans to impose a tax on large technology companies, the so-called Big Tech, Politico reports, a fact that gives a significant victory to US President Donald Trump and gives "breathing space" to American giants like Apple and Meta.
With Europe and the United States in the final stages of negotiations to end their trade war, Brussels has removed the option of a digital tax from the list of proposed taxes to raise revenue during the next seven-year EU budget, according to a plan published on Friday.
With just a few days left until the presentation of the draft budget, senior EU officials are in discussions to decide which taxes will be included in the Commission's proposal, to be published on Wednesday (July 16), for the budget starting in 2028.
The relevant draft, which could certainly be amended before its approval, set out a list of possible taxes, but did not specify the amount of revenue that each of them would generate.
A decision against a digital tax would be a major reversal for the EU, which as recently as May proposed taxing tech giants as a way to pay down the bloc's debt. The idea was mentioned in a document on the next budget discussed by the 27 EU commissioners.
This is actually a 180-degree turn, which could be a strategic move by Europe, which is seeking favorable terms in trade, while Trump is exerting pressure and warning with tariffs.
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