United States trade representative (USTR) Katherine Tai yesterday announced the conclusion of the one-year Section 301 investigations of digital service taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey and the United Kingdom. As a result of the probe, additional tariffs will now be imposed on certain goods from these countries.
However, the tariffs have been suspended for up to 180 days to offer additional time to complete the ongoing multilateral negotiations on international taxation at the Organisation for Economic Cooperation and Development (OECD) and in the G20 process.United States trade representative (USTR) Katherine Tai yesterday announced the conclusion of the one-year Section 301 investigations of digital service taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey and the United Kingdom. As a result of the probe, additional tariffs will now be imposed on certain goods from these countries.#
“The United States is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with digital services taxes,” said Tai.
“The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. 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.”
On June 2 last year, USTR initiated investigations into DSTs adopted or under consideration in ten jurisdictions: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey and the United Kingdom.
In January 2021, USTR determined that the DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom discriminated against US digital companies, were inconsistent with principles of international taxation, and burdened US companies.
In March 2021, USTR announced proposed trade actions in these six investigations, and undertook a public notice and comment process, during which it collected hundreds of public comments and held seven public hearings.
USTR 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.
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