US suspends tariffs on 6 nations for digital service tax negotiations

By Sarkaritel June 4, 2021 12:22

Washington, June 4  The US announced that it will impose tariffs on certain goods from Austria, Britain, India, Italy, Spain and Turkey over disputes on Digital Service Taxes (DSTs), while noting that it will suspend tariffs for six months for multilateral negotiations.

US Trade Representative (USTR) Katherine Tai said in a statement on Wednesday that the final determination in the one-year Section 301 investigations of DSTs adopted by the six countries is to impose additional tariffs on certain goods from these countries, reports Xinhua news agency.

Tai, however, noted that the US will suspend the tariffs for up to 180 days to provide “additional time” to complete the ongoing multilateral negotiations on international taxation.

“The US remains committed to reaching a consensus on international tax issues through the OECD (Organization for Economic Cooperation and Development) and G20 processes,” Tai said.

“Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future,” said the USTR.

In July 2019, the US launched a Section 301 investigation into France’s planned tax on digital services, accusing the French government of “unfairly targeting the tax at certain US-based technology companies”.

French Finance Minister Bruno Le Maire, however, argued that the tax is necessary to make big internet companies pay their fair share of taxes.

In June 2020, the US initiated Section 301 investigations into DSTs considered by 10 American trading partners, including the European Union, Brazil and India.

In January this year, the USTR decided to suspend proposed additional 25 per cent tariffs on about $1.3 billion worth of French products amid DSTs dispute, “in light of the ongoing investigation of similar DSTs adopted or under consideration in ten other jurisdictions”.

Also in January, USTR determined that the DSTs adopted by Austria, Britain, India, Italy, Spain, Turkey discriminated against US digital companies, were inconsistent with principles of international taxation, and burdened the firms.

In March, USTR announced proposed trade actions in these six investigations, and undertook a public notice and comment process.

It also terminated the remaining four investigations (of Brazil, the Czech Republic, the European Union, and Indonesia) “because those jurisdictions had not implemented the DSTs under consideration”.

By Sarkaritel June 4, 2021 12:22

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