Thursday, 08 April 2021 09:43

US plans tariffs on six nations in retaliation for taxing tech firms

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US plans tariffs on six nations in retaliation for taxing tech firms Image by Clker-Free-Vector-Images from Pixabay

The United States is going ahead with a plan to impose tariffs of about US$880 million (A$1.2 billion) annually on goods from six countries that have levied taxes on digital companies.

This figure has been calculated by Bloomberg which also listed details of the taxes levied by the six countries in question.

The office of the US Trade Representative said in a statement that investigations had shown that the digital service taxes levied by these six countries were subject to action.

The USTR said the six countries were the UK, Turkey, Spain, Italy, India and Austria, all of whom have put in place taxes on companies like Facebook and Amazon.

Three other countries — Brazil, the Czech Republic and Indonesia — and the European Union had not adopted digital service taxes and hence investigations into them had been dropped.

The action was contemplated "because they [the six nations] discriminated against US digital companies... [in a way that was] inconsistent with principles of international taxation, and burdened US companies," the statement said.

The tariffs on each country would roughly come to the amount of tax that each gets from the technology firms. Tariff on some goods could be as much as 25%.

“The US is committed to working with its trading partners to resolve its concerns with digital services taxes, and to addressing broader issues of international taxation,” said US Trade Representative Katherine Tai.

“The US remains committed to reaching an international consensus through the OECD process on international tax issues. However, until such a consensus is reached, we will maintain our options under the Section 301 process, including, if necessary, the imposition of tariffs.”


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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