The US government is moving ahead with possible trade sanctions against Austria, India, Italy, Spain, Turkey and the UK in retaliation for their digital sales taxes. The US trade representative said the taxes discriminated against US digital companies and were inconsistent with principles of international taxation, resulting in a burden for American companies. The USTR started a public consultation on possible measures against the countries.
The government said in a statement that it would continue work in the OECD platform on new international tax rules. However, until an agreement is reached there, it will "maintain our options . . . including, if necessary, the imposition of tariffs."
The proposal is to impose tariffs of 25 percent on an equivalent value of goods from each of the countries to the value of sales of US companies affected by the digital service taxes.
The US launched an investigation into the digital service taxes in June 2020. It is holding off on action against Brazil, the Czech Republic, the European Union and Indonesia as they have not adopted or implemented the proposed taxes yet. The USTR said it is terminating these four investigations without further proceedings, but may reopen the procedures if things change.
