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WASHINGTON — United States had an agreement Austria, France, Italy, Spain and the UK on Thursday will end the threat of American tariffs on certain goods from these countries in exchange for the eventual removal of digital services taxes they have imposed on companies such as Facebook, Amazon and Google.
The deal comes as more than 130 countries agreed this month To overhaul the international tax system that will change the taxation rights of nations to adopt a global minimum tax of 15 percent, so that large multinational companies are taxed based on where their goods and services are sold rather than where they operate.
The part of the deal that applies to large firms came in response to a global tax dispute between the United States and European countries in recent years. digital service taxes It targeted American tech giants.
With the agreement reached on Thursday, Austria, France, Italy, Spain and the UK will abolish digital services taxes once part of the global agreement known as Pillar 1 goes into effect. This is expected to happen in 2023. Taxes collected from companies between now and then will be eligible for the credit.
The deal marks a concession from the United States, which calls for the immediate removal of digital services taxes once the global agreement is reached earlier this month. European countries have refused to do so, citing concerns about whether the United States could actually get the new tax changes through Congress to comply with the treaty.
The Trump administration first imposed tariffs on France in 2020. retaliation against digital services tax and started the process of applying tariffs to other countries. The Biden administration said earlier this year that it was ready to impose tariffs on these governments, but is suspending any action pending global tax talks.
The U.S. Trade Representative said Turkey and India, which also have digital services taxes that the U.S. wants to roll back, did not agree with the deal reached on Thursday.
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