US temporarily suspends certain digital tariffs from UK, India and 4 EU nations

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Washington, Jun 2 (PTI) The US on Wednesday temporarily suspended imposition of Digital Service Taxes (DSTs) on certain services from the United Kingdom, India, Austria, Italy, Spain and Turkey so as to have additional time to complete the ongoing multilateral negotiations.

The suspension came after US Trade Representative Katherine Tai announced the conclusion of year-long Section 301 investigations of Digital Service Taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom.

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 OECD and in the G20 process.

“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,' Tai said in a statement.

'The US remains committed to reaching a consensus on international tax issues through the OECD and G20 processes,” Tai said.

'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,” she said.

A year ago 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.

It was strongly opposed by India.

India has earlier stated that the equalisation levy is not discriminatory and only seeks to ensure a level-playing field with respect to e-commerce activities undertaken by entities with permanent establishment in India.

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 this year, 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.

It 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, USTR said in a statement. PTI LKJ ZH ZH