US suspends tariffs for six months on UK, India, EU nations in digital tax dispute

AgenciesUpdated: Wednesday, June 02, 2021, 10:59 PM IST
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US suspends tariffs for six months on UK, India, EU nations in digital tax dispute |

US Trade Representative Katherine Tai on Wednesday announced the suspension of the tariffs in the digital tax dispute with several trading partners including India for six months, to provide additional time to complete the ongoing multilateral negotiations at the inter-governmental economic organization.

"The final determination in those investigations is to impose additional tariffs on certain goods from these countries while suspending the tariffs for up to 180 days to provide additional time to complete the ongoing multilateral negotiations on international taxation at the Organisation for Economic Co-operation and Development (OECD) and in the G20 process," Office of US Trade Representative (USTR) said in a statement.

"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 Ambassador Katherine 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." According to an official release, on June 2, 2020, 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, following comprehensive investigations 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 U.S. 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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