Digital taxes adopted by India, Italy and Turkey in recent years discriminate against US companies, a US spokesman said on Wednesday.
The USTR, which launched investigations into the three nations' digital services taxes last June, said it considers them inconsistent with international tax principles, unreasonable, and burdensome/restrictive to U.S. trade.
In its detailed reports, which the office released, the USTR studied how these digital taxes (or digital services taxes) affected companies like Amazon, Google, Facebook, Airbnb and Twitter. The USTR said it conducted these investigations under Section 301 of the US Trade Act of 1974.
India, which has become the biggest market for Silicon Valley giants Google and Facebook, introduced digital services taxes in 2016 to target foreign companies.
The USTR investigation found that New Delhi was taxing “numerous categories of digital services that did not fall under the category of digital services taxes adopted around the world” and that the total tax bill for American companies could exceed $30 million annually. The same issue exists with India , which does not impose similar taxes on local companies.
Despite the strong findings on the three nations' digital services taxes, USTR said it would not take specific actions "at this time," but would "continue to evaluate all available options."
U.S. tech companies have previously supported the terms of the Organization for Economic Cooperation and Development (OECD). But the OECD, which is currently working out the technical details for agreements for more than 100 nations, does not expect to complete that work until mid-2021. Since the OECD agreements have not materialized, various countries are moving forward with their own versions of the taxes.
Information source: techcrunch.com
