The proposal is part of the EU’s wider effort to make Europe ‘fit for the digital age’ and align the bloc with other major democracies, particularly the United States, on technology issues. Prospects for this alignment have improved since US President Joe Biden re-engaged with OECD talks on digital taxation, but many critical divisions remain.
- Digital taxes deeply divide US policymakers: some Republicans threaten to reverse US participation in any OECD tax plan.
- The EU’s claims to leadership on tech governance will be hard to sustain given its slow progress in cutting-edge technologies.
- The EU will see data protection as a civil rights issue, whereas US policy will chart a market-based approach.