Background

No tariff increases are being imposed on goods from Austria, Spain, or the United Kingdom after investigations of digital services taxes in those countries.

The Office of the U.S. Trade Representative said it found that DSTs in each of these countries discriminate against U.S. companies, are inconsistent with prevailing principles of international taxation, and burden or restrict U.S. commerce. However, USTR Robert Lighthizer said the “best outcome” for resolving the issue of taxation of companies engaged in international trade in goods and services “would be for countries to come together to find a solution.” In the meantime USTR plans to “continue to evaluate all available options” in connection with these investigations.

USTR previously made similar determinations, and also took no tariff action, with respect to DSTs in India, Italy, and Turkey. In addition, USTR postponed until further notice a tariff increase on imports from France that was to have taken effect Jan. 6 in light of that country’s DST.

DSTs are also under consideration or development in Brazil, the Czech Republic, the European Union, and Indonesia but are not currently in effect. A status report on USTR’s ongoing investigations of these proposals expresses (1) “serious concerns” about those in Brazil and the Czech Republic, (2) concern that the EU may take an approach to DSTs that could be discriminatory, unreasonable, and burdensome and restrictive to U.S. commerce, and (2) “preliminary concerns” about a DST law in Indonesia because implementing measures have not been adopted.

For more information, please contact Nicole Bivens Collinson or Kristen Smith.

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