Washington – The United States has announced an extension of the deal struck with Austria, France, Italy, Spain, and the United Kingdom to terminate their digital services taxes (DSTs). In the deal, the five countries agreed to replace their discriminatory digital services tax regimes that target revenues of predominantly U.S. digital service suppliers, with an OECD-developed approach that changes taxing rights, on profits rather than revenue, and applies to a broader set of firms engaged in international trade. This change, bringing alignment with the OECD/G20 Inclusive Framework, will now last until June 30. This news comes as the European Union reportedly plans to pressure fellow G20 members to finalize the two pillars of tax measures in the Framework at the summit later in February.
CCIA has advocated against discriminatory taxation of digital services and encouraged countries to instead adhere to the agreements struck under the OECD/G20 Inclusive Framework. Most recently, CCIA joined trade associations in sending a letter urging the Biden Administration to counter Canada’s efforts to enact its proposed digital services tax (DST) in December, and submitted comments to Finance Canada on its proposal in September.
The following can be attributed to CCIA Vice President of Digital Trade Jonathan McHale:
“It is promising to see allies of the United States renew their commitment to end discriminatory taxation measures that would harm U.S. digital services providers. The OECD/G20 Inclusive Framework must continue to receive support from the international community and be given the chance to meet its goals on the agreed upon timeline. Despite this agreement to end discriminatory DSTs by a set date, certain countries, most notably Canada, have opted to go backwards, replicating the very discriminatory digital services taxes these five countries just agreed to terminate. CCIA urges Canada and others to reconsider its approach and double down on the multilateral approach that fosters fair trade.”