European Union governments on Tuesday scrapped a plan to introduce an EU-wide digital tax as some member states opposed it.
The move is likely to be welcomed by digital giants such as Google and Facebook who would have fallen under the scope of the envisaged 3 percent levy.
However they face similar taxes that EU states, such as France, Italy, Britain and Spain, are introducing at national level.
The Romanian presidency of the EU said there was no agreement on the tax despite months of talks, as the bloc’s Nordic countries and Ireland kept opposing the reform.
He said ministers would now focus on trying to reach a common position for an overhaul of digital taxation at a global level by 2020, confirming a Reuters report last week.
The Organization for Economic Co-operation and Development (OECD), a club of mostly wealthy nations, is currently working on a global reform of digital taxation to narrow loopholes that allow large multinational firms to greatly cut their tax bills.