The United States agrees to lower tariffs on countries that have imposed taxes on digital services as a global tax overhaul moves forward.

WASHINGTON – The United States reached an agreement Thursday with Austria, France, Italy, Spain and Great Britain who will end the thre...


WASHINGTON – The United States reached an agreement Thursday with Austria, France, Italy, Spain and Great Britain who will end the threat of US tariffs on certain products from these countries in exchange for the possible elimination of taxes on digital services that they had imposed on companies like Facebook, Amazon and Google.

The deal comes as more than 130 countries agreed this month an overhaul of the international tax system that will encourage countries to adopt a global minimum tax of 15% and change tax rates so that large multinational corporations are taxed based on where their goods and services are sold, rather than where they operate.

The part of the deal that applies to large corporations was a response to a global tax dispute between the United States and European countries, which in recent years imposed taxes on digital services targeting the US tech giants.

Thanks to the deal reached on Thursday, Austria, France, Italy, Spain and Britain will remove their taxes on digital services once this part of the global deal, known as Pillar 1, will be promulgated. This is expected to happen sometime in 2023. Taxes collected from businesses by then will be eligible for credit.

The deal is tantamount to a concession by the United States, which wanted taxes on digital services to be removed immediately once the global compact is struck this month. European countries refused, citing concerns over whether the United States could get the new tax changes through Congress to properly comply with the deal.

The Trump administration initially imposed tariffs on France in 2020 in retaliation for its digital services tax and started the process of imposing tariffs on other countries as well. The Biden administration said this year it was ready to impose tariffs on those governments, but suspended action while global tax negotiations were ongoing.

The U.S. Trade Representative’s office said Turkey and India, which also have digital services taxes the U.S. wants to cancel, did not adhere to the deal reached on Thursday.

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Newsrust - US Top News: The United States agrees to lower tariffs on countries that have imposed taxes on digital services as a global tax overhaul moves forward.
The United States agrees to lower tariffs on countries that have imposed taxes on digital services as a global tax overhaul moves forward.
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