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U.S. Senate Committee on Finance Publishes Letter to European Council and Commission on Concerns with Proposed Digital Services Tax — Orbitax Tax News & Alerts

The U.S. Senate Committee on Finance has published a letter dated 18 October 2018 from Committee Chairman Hatch and Ranking Member Wyden to European Council President Tusk and European Commission President Juncker regarding concerns with the Commission's proposed three-percent digital services tax (DST). In the letter, Hatch and Wyden urge the EU to abandon the proposal, which they say has been designed to discriminate against U.S. companies and to undermine the international tax treaty system.  Issues with the DST highlighted in the letter include that it will undoubtedly lead to double taxation, it is discriminatory for companies within its scope, which violates WTO obligations, its enforcement would likely be inconsistent, and it would be costly for both taxpayers and taxing authorities to implement, which is largely a burden on U.S. companies and a barrier to transatlantic trade.