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Austria suspends digital tax against US for long – Economy –

Austria suspends digital tax against US for long – Economy –


Kathryn Doi once threatened tariffs because of the digital tax
©APA/AFP

Austria and four other European countries have agreed with the US on an extended moratorium on digital services taxation. A joint statement from US Trade Representative Catherine Doyle's office with Austria, Britain, France, Italy and Spain said the October 2021 agreement to end US retaliatory tariffs on digital taxes would be extended until June 30.

The contract was previously limited to the end of 2023. The extension aims to give larger, more profitable companies more time to negotiate international taxation rights.

The US Trade Representative had earlier threatened to impose a 25 percent tariff on imports from five European countries and Turkey as these countries introduced a digital tax. According to Tai, the taxes on digital services are discriminatory because they primarily target US tech giants Facebook owner Meta, Google parent Alphabet, Amazon.com and Apple. The US has already introduced retaliatory measures against France over its national digital tax, but has initially held them off.

The original agreement represented a compromise. According to it, the five countries were allowed to keep their digital taxes, but at least they had to suspend them until a global tax treaty was implemented. Thursday's joint statement expands on the status quo and is consistent with a statement by the G20 and OECD countries in December that a deal should be finalized by the end of March and signed by June 30.

By October 2021, under the umbrella of the OECD, the Organization of Industrialized Nations, nearly 140 countries had agreed on the details of global tax reform. This includes a minimum tax of 15 percent for companies operating internationally. In addition, developing countries need to receive more revenue from the world's largest corporations. Tax havens need to dry up and big digital companies in particular need to be more accountable.

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