WASHINGTON: The digital services tax adopted by India, Italy and Turkey discriminates against US companies and is inconsistent with international tax principles, the US trade representative office said on Wednesday, paving the way for potential retaliatory tariffs.
USTR, releasing the findings of its “Section 301” investigation on digital taxes, said it was not taking specific action at this time, but “will continue to evaluate all available options.”
The probe is among several USTR Section 301 investigations still open that could lead to tariffs before President Donald Trump leaves office or at the start of President-elect Joe Biden’s administration. Among them is a further investigation into France’s digital services tax.
The USTR has set a January 6 deadline for imposing a 25% tariff on French cosmetics, handbags and other imports worth an estimated $ 1.3 billion per year in retaliation for French digital taxes.
But it was unclear on Wednesday evening whether the collection of the duties would begin as scheduled. Spokesmen for USTR and Customs and Border Protection, the body responsible for tariff collection, did not respond to multiple requests for comment.
The USTR concluded that the digital taxes imposed by France, India, Italy and Turkey were heavily discriminatory US technology company
, such as Google, Facebook, Apple, and Amazon.com.
In the latest report, it also said the Indian, Italian and Turkish taxes “make no sense” because they are “inconsistent with international taxation principles, including because of their application to income rather than income, extraterritorial application, and failure to provide tax certainty.”