The Office of the United States Trade Representative (USTR) has announced the release of its findings in Section 301 investigations of Digital Service Taxes (DSTs) adopted by India, Italy, and Turkey, concluding that each of the DSTs discriminates against U.S. companies. However, it is noted that the USTR is not taking any specific actions in connection with the findings at this time.
The USTR has also announced that its decision to suspend the tariffs on France that were scheduled to go into effect on 6 January 2021 in response to the French DST. The decision was made in light of ongoing investigations into other DSTs, with a coordinated response to be developed after all investigations are completed.
USTR Releases Findings in DST Investigations
Washington, DC – The U.S. Trade Representative has issued findings in Section 301 investigations of Digital Service Taxes (DSTs) adopted by India, Italy, and Turkey, concluding that each of the DSTs discriminates against U.S. companies, is inconsistent with prevailing principles of international taxation, and burden or restricts U.S. commerce.
The findings on each of the DSTs are supported by comprehensive reports, which are being published today on USTR’s website.
USTR is not taking any specific actions in connection with the findings at this time but will continue to evaluate all available options.
The Section 301 investigations of the DSTs adopted by India, Italy, and Turkey were initiated in June 2020, along with investigations of DSTs adopted or under consideration by Austria, Brazil, the Czech Republic, the European Union, Indonesia, Spain, and the United Kingdom. USTR expects to announce the progress or completion of additional DST investigations in the near future.
The reports and Federal Register notices summarizing the determinations are available at the following links: India DST report; India DST notice; Italy DST report; Italy DST notice; Turkey DST report; Turkey DST notice.
Suspension of Tariff Action in France Digital Services Tax Investigation
Washington, DC – The U.S. Trade Representative has determined to suspend the tariff action in the Section 301 investigation of France’s Digital Services Tax (DST). The additional tariffs on certain products of France were announced in July 2020, and were scheduled to go into effect on January 6, 2021. The U.S. Trade Representative has decided to suspend the tariffs in light of the ongoing investigation of similar DSTs adopted or under consideration in ten other jurisdictions. Those investigations have significantly progressed, but have not yet reached a determination on possible trade actions. A suspension of the tariff action in the France DST investigation will promote a coordinated response in all of the ongoing DST investigations.
The suspension of the France DST tariffs is set out in a notice sent for publication in the Federal Register.