Digital tax controversy: US threatens retaliation charges

Wednesday, June 2, 2021

Controversy over digital tax
The United States is threatening retaliatory fees

American Internet companies do business around the world, but the fact that most countries do not pay taxes is a thorn in many countries. So some states have introduced special digital taxes. This is a thorn in the side of the US government.

The U.S. government is increasing pressure on Great Britain and five other countries over the digital tax controversy over US technology companies Alphabet, Amazon and Facebook. U.S. Trade Representative Katherine Toy announced a 25 percent retaliation fee for goods worth more than $ 2 billion. However, they will initially be suspended for six months to find an international negotiating solution at this time.

The United States threatens Great Britain and India and Austria, Italy, Spain and Turkey, with high import restrictions on some of their exports. In particular, if there is no agreement, an additional charge of 25 per cent will be levied. As for Great Britain, it is about clothing, jewelry and cosmetics. Based on import data for the 2019 calendar year, the U.S. government puts the target for affected goods here at about $ 887 million.

Italy is threatened with high fees for perfumes, handbags and ties, here the amount is about $ 386 million. Spain has to deal with significantly higher export restrictions on $ 324 million worth of goods, with Turkey at 310 million, India and Austria at 118 and 65 million respectively.

According to Toy, the United States hopes to resolve the digital tax dispute with the help of the OECD and the G20. In March, the Office of the Trade Representative concluded investigations into discrimination against US companies by the European Union, Brazil, Indonesia and the Czech Republic so that there was no risk of tariff increases.

There is still a dispute with France. Here the United States had already announced penalty fees for products worth $ 1.3 billion, but these were initially discontinued in the hope of an integrated international solution.