The U.S. states that digital taxes are discriminatory in India, Italy, and Turkey, but will not take any action for the time being

On Wednesday, the US Trade Representative said that the digital service tax adopted over the past few years by India, Italy and Turkey is suspected of discriminating against US companies. In June last year, the U.S. Trade Representative began an investigation into these three countries’ digital service taxes, stating that they found that these taxes did not comply with the principles of international taxation, were unreasonable, and imposed burdens or restrictions on U.S. businesses.

USTR has studied how these digital taxes affect businesses such as Amazon, Google, Facebook, Airbnb and Twitter in a detailed report made public by the office. Based on Section 301 of the US Trade Act of 1974, USTR stated that it conducted these investigations.

For instance, for Silicon Valley giants Google and Facebook, India has become the largest market. India implemented a digital tax for foreign companies in 2016. The second largest Internet market in the world last year expanded the collection’s scope to cover a series of additional categories.

The USTR survey found (PDF) that “many categories of digital services that are not taxable under other digital service taxes used globally.” are taxed by New Delhi. The total annual tax bill may exceed $30 million for US businesses. India’s failure to impose similar taxes on local companies was also questioned by the USTR.

“will not take any specific actions at this time, but will continue to evaluate all available options.”at this time, it will not take any specific action, but will continue to evaluate all the options available.

The terms of mediation provided by the Organization for Economic Cooperation and Development (OECD) have been supported in the past by American technology companies. However, for more than 100 countries, the OECD is currently working on the technical details of the agreement, and it is expected that this work will not be completed until mid-2021. Each country is promoting its own version of taxation in the absence of an OECD agreement.

Ever since last June, the U.S. The Office of the Trade Representative has launched an investigation into the digital service tax introduced or proposed by certain countries, including Austria, the European Union, the Czech Republic, Spain, the United Kingdom and France. A digital service tax is imposed by U.S. firms.

In retaliation, the USTR set a deadline of January 6 to impose tariffs of 25 percent on a number of French imports, including cosmetics and handbags.

The US Trade Representative did not specify whether the tariffs had been introduced, but stated in a statement that it expects to announce in the near future the progress or completion of further investigations.