A joint statement from the Office of U.S. Trade Representative Katherine Tai along with Austria, Britain, France, Italy and Spain said an October 2021 agreement to suspend threatened U.S. retaliatory tariffs on digital taxes will be extended until June 30.
The agreement was previously limited to the end of 2023. The extension aims to give more time to negotiate international taxation rights for large, highly profitable companies.
- Also read: Digital taxes brought in 103 million euros for the state last year
The US Trade Representative had previously threatened tariffs of 25 percent on imports from the five European countries and Turkey because these countries had introduced a digital tax. According to Tai, the taxes on digital services are discriminatory because they are primarily aimed at US tech giants such as Facebook owner Meta, Google parent Alphabet, Amazon.com and Apple. The US has already introduced retaliatory measures against France over its national digital tax, but has initially suspended them.
Agreement until the end of March
The original agreement represented a compromise. According to this, the five countries were allowed to keep their digital taxes, but should at least suspend them until a global tax agreement is implemented. Thursday’s joint statement extends the status quo, so to speak, and aligns with a statement from G20 and OECD countries in December calling for an agreement to be finalized by the end of March and signed by June 30.
In October 2021, under the umbrella of the industrialized nations organization OECD, almost 140 countries agreed on the details of a global tax reform. This includes a minimum tax of 15 percent for internationally operating companies. In addition, emerging countries should receive more revenue from the world’s largest corporations. Tax havens should be dried up and large digital companies in particular should be made more responsible.
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