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France and Germany abandon digital services tax

December 04, 2018 / Patrick Smyth

The digital services tax (DST) is off the EU table for now. France and Germany told fellow EU finance ministers they accepted the controversial proposed tax on the digital giants had no hope of passing and that they would instead propose a reduced version of it a tax on digital advertising, levied at 3 percent on the big companies. The ministers asked the European Commission to work on the new proposals and to return to Ecofin with them in January or February. Minister for Finance Paschal Donohoe made it clear to colleagues that he “continues to have strong principled concerns about this policy direction”, signaling a continuing Irish unwillingness to lift its veto on an issue that requires unanimity. Ireland has led the opposition to the DST.