British-backed plans for an international deal to impose a tax on technology giants like Google and Amazon were struck a blow yesterday after Ireland and Sweden signaled they were likely to torpedo proposals for a European Union-wide digital services tax.

EU policymakers will decide whether to back a new tax to target technology companies like Amazon and Google on December 4, after repeated calls for a 3pc levy on digital sales and services regardless of their physical presence in a country.

Supporters of the tax, including French finance minister Bruno Le Maire, had hoped that it would be approved by all member states before Christmas.

But Ireland and Sweden have cited "fundamental objections" to the proposals, arguing that the European Union's tax proposals should not be finalised before the Organisation for Economic Co-operation and Development (OECD) achieves a global agreement on tax, which is expected by 2020.

The news comes as a blow for Philip Hammond who last month called for global cooperation on a digital services tax and unveiled plans for a unilateral UK tax.

The Chancellor said he intends to push ahead with a 2pc tax on advertising revenues and other digital revenues from big tech companies with over £500m in turnover. The tax is expected to rake in £400m per year for HMRC.

The plans are currently under consultation and may change if there is an international agreement can be reached. He said a global deal on a new way to tax technology companies was preferable.