The European Commission yesterday confirmed it would delay introducing any such measure until autumn. It comes after US Treasury Secretary Janet Yellen jetted into the Belgian capital for frank discussions with the EU counterparts. She also demanded that Hungary, Ireland and Estonia drop their opposition to a global tax reform deal that would impose a minimum levy on multinational corporations.

       Ms Yellen met with Eurozone finance ministers on Monday to discuss the issues, as well as deepening transatlantic links.

       She praised the EU’s response to the economic crisis caused by the coronavirus pandemic as “decisive and unprecedented”.

       But she also warned the bloc has not gone far enough in its efforts.

       Ms Yellen insisted EU nations needed to “seriously consider additional fiscal measures” aimed at ensuring a robust domestic and global recovery.

       And she called on the EU to grant “sufficient flexibility” to allow countries to respond to future crises.

       Her pressure was seemingly enough to convince Brussels to back down on its plans to introduce an EU-wide levy of digital firms.

       The Commission confirmed it was shelving the proposals for the time being to focus on a global tax pact.

       “Successfully concluding this process will require a final effort from all parties, and the Commission is committed to focusing on that effort,” a spokesman said.

       “For this reason, we have decided to put on hour our work on a proposal for a digital level as a new EU own resource during this period.”

       Taxation on digital firms is set to become a highly controversial topic in Brussels to a multitude of reasons.

       It will be used to help repay the grants handed out to pandemic-stricken industries and regions through the bloc’s coronavirus recovery fund.

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       But some low-tax nations, such as Ireland, have warned it could have a significant impact on foreign investment into their countries.

       Before the delay, Brussels had hoped to publish its proposals for the digital levy this week.

       Over the weekend, an official told the FT: “The Commission is reflecting on how to support the historic G20 deal.

       “In that context we are considering a possible postponement to the autumn of the details proposal on the digital tax.”

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       Washington believed the EU’s plans would have clashed with an agreement for minimum global level of corporation tax being brokered by the OECD.

       Pascal Saint-Amans, the OECD’s head of tax administration, welcomed the delay.

       “The postponing of the EU digital levy is good news.

       “It is wiser indeed to wait for the deal to be finalised and not risk any disruption with ongoing complicated legislative processes.”