The European Commission’s digital advertising tax proposal was rejected by the finance ministers at Wednesday’s ECOFIN meeting, on the basis that there should be global agreement on such a tax, in order to protect the EU’s competitiveness.

The arguments for this rejection focused mainly on the discussions at OECD level, which highlights the importance of having a global agreement for such a tax, rather than solely a European initiative.

The ECOFIN ministers agreed that discussion on the digital services tax would be discussed by the Council should international initiatives for reaching a global agreement fail.

Finance Minister Edward Scicluna, who represented Malta at the meeting, said that Malta would not object on condition that this tax did not become effective prior to January 1, 2022, by when it hoped that a global solution would be found.

“Changes to production and consumption patterns due to digitisation may require a review of the current tax systems to avoid eroding the tax-base. But this change cannot be undertaken unilaterally,” he stressed.

At the meeting, the ministers approved a revised list of non-cooperative tax jurisdictions which now also includes jurisdictions which are still deemed to be non-cooperative on tax matters, while others were removed after having acted on the initial concerns.