The US' safe harbour proposals came to light in December 2019, when then Treasury Secretary Steven Mnuchin questioned the OECD in a letter that was made public as the development body attempted to re-write international tax rules.
The OECD's proposals – commonly referred to as Pillar One – included giving governments more power to tax large multi-nationals, and at the time tax experts warned Mnuchin's actions could lead to US companies being able to opt out of international agreements.
On Friday Yellen told G20 finance ministers that Washington would drop its opposition to global digital taxation rules.
Yellen said at the meeting that the US “is no longer advocating for safe harbour implementation”, and that the country “will engage robustly to address both pillars of the OECD project, the tax challenges of digitisation and a robust global minimum tax”.
The G20 said it aimed to reach a solution by mid-2021.
Meanwhile, Britain is reportedly pushing G7 nations to "build a consensus" on how to stop large tech companies "exploiting their dominance" following Facebook's media blackout in Australia.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday following a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Reuters said Britain is working on a "new competition regime", it said will give consumers more control over their data, and introduce legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
