U.S. Drops Digital Tax Demand, Opening Door to Global Deal (1)

The U.S. has dropped a key demand in negotiations over digital taxation of technology companies such as Alphabet Inc.’s Google and Facebook Inc., lifting a barrier that had raised transatlantic trade tensions and prevented an international deal.

Treasury Secretary Janet Yellen told her counterparts at a virtual meeting of Group of 20 finance officials that the U.S. is no longer calling for a so-called safe harbor rule that would allow U.S. companies to opt out of paying such a tax overseas, according to a Treasury spokeswoman.

Yellen said the U.S. will now engage robustly in negotiations on both that issue ...