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US reaches multi-country agreement on Digital Services Taxes

27
Oct '21

Pic: Shutterstock

The US has reached an agreement with Austria, France, Italy, Spain and the UK regarding the treatment of Digital Services Taxes (DSTs) during the interim period prior to full implementation of Pillar 1 of the Organization for Economic Co-operation and Development (OECD) agreement. The Office of the United States Trade Representative (USTR) has welcomed the announcement by the department of the treasury.

Under the Agreement, in defined circumstances, DST liability that US companies accrue during the interim period will be creditable against future income taxes accrued under Pillar 1 under the OECD agreement. In return, the US will terminate the currently suspended additional duties on goods of Austria, France, Italy, Spain and the UK that had been adopted in the DST Section 301 investigations.

USTR is proceeding with the formal steps required for terminating the Section 301 trade actions, and in coordination with Treasury, will monitor implementation of the agreement going forward.

“I commend Austria, France, Italy, Spain and the UK for addressing US concerns regarding unilateral digital services taxes,” Ambassador Katherine Tai said. “We reached our agreement on DSTs in conjunction with the historic OECD global agreement that will help end the race to the bottom over multinational corporate taxation by levelling the corporate tax playing field.”

In coordination with Treasury, we will work together with these governments to ensure implementation of the agreement and rollback of existing DSTs when Pillar 1 enters into effect. We will also continue to oppose the implementation of unilateral digital services taxes by other trading partners,” added Tai.

The agreement on DSTs is reflected in a Joint Statement from Austria, France, Italy, Spain the UK, and the US Regarding a Compromise on a Transitional Approach to Existing Unilateral Measures During the Interim Period Before Pillar 1 is in Effect. Turkey and India, the other two countries covered by the DST investigations, have not joined in the agreement.

Fibre2Fashion News Desk (KD)

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