The office of the US Trade Representative (USTR) recently said it would hold off slapping 25 per cent tariffs on import of French cosmetics, handbags and other items retaliating to a digital services tax (DST) that, according to the US government, will harm US tech firms, while it investigates similar taxes elsewhere. The tariffs were due to go into effect on January 6.
Washington had announced the tariffs in July last year after a US investigation showed a French digital services tax (DST) unfairly singled out US companies like Google, Facebook, Apple and Amazon.The office of the US Trade Representative recently said it would hold off slapping 25 per cent tariffs on import of French cosmetics, handbags and other items retaliating to a digital services tax that, according to the US government, will harm US tech firms, while it investigates similar taxes elsewhere. The tariffs were due to go into effect on January 6.#
Several nations, including France, see digital service taxes as a way to raise revenue from domestic operations of big global tech companies, which they say, profit enormously from local markets while making only limited contributions to the states’ treasury.
USTR said suspending the action against France would allow Washington to pursue a coordinated response in 10 investigations into similar taxes in India, Italy, the United Kingdom and other countries.
“The U.S. Trade Representative has decided to suspend the tariffs in light of the ongoing investigation of similar DSTs adopted or under consideration in ten other jurisdictions,” the agency said in a statement, adding it had not yet determined possible trade actions in the other cases.
European leaders and industry groups welcomed the news, saying it would allow more time for talks on a global taxation solution to bear fruit.
The USTR later also said it had found that digital services taxes adopted by India, Italy and Turkey also discriminated against US companies and were inconsistent with international tax principles, but held off on announcing any specific tariff actions.
ALCHEMPro News Desk (DS)
marketing@alchempro.com
