US tariffs to hit Austria, India, Italy on digital tax |
The United States will soon issue the results of probes into Austria, Italy, and India`s decisions to tax local revenue of Internet companies such as Facebook Inc. and Google, which could pave the way for retaliatory tariffs. According to the sources, determinations on the three countries are due because all of them have instituted so-called digital services taxes or levies on local sales of companies such as Alphabet Inc.`s Google this year. The U.S. Trade Representative in June started investigations into the moves of at least 10 countries, citing Section 301 of the U.S. Trade Act of 1974, which allows it to retaliate for trade practices it deems unfair. It`s the same tool used to justify U.S. tariffs on Chinese goods for alleged theft of intellectual property. Last year, the USTR announced levies on $2.4 billion of French wines, cheeses, and other products as a result of France`s digital tax. The U.S. and France agreed to delay both the tariffs and the collection of the tax through the end of 2020. Plans for an international digital-tax agreement brokered by the Organization for Economic Cooperation and Development ( OECD) have been delayed until at least summer 2021 after it became clear that the initial deadline of reaching a deal this year wouldn`t be met. The goal had been to replace an individual country`s digital taxes with a global plan, but it`s unclear how quickly a deal can be reached.
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