In the wake of the digital tax controversy, the US government has suspended fines against India for several European countries, including Austria. US Trade Representative Katherine Tai announced on Wednesday that sanctions would be lifted for six months as Washington and the states concerned resolve the dispute.
The background to this is the search for the regulation of international taxation by large digital companies such as Facebook, Google and Amazon. The cancellation affects Great Britain, Austria, Spain, Italy and Turkey and India. In March, the United States threatened Austria with fines. Tariffs on 25 per cent of French goods worth $ 1.3 billion were already suspended in January. These were collected during the tax dispute.
“The United States continues to seek consensus on international tax matters through the OECD and the G20 processes,” Tai said. Today’s actions will form the basis for further negotiations. Meanwhile, the trade representative added that Washington has the option to impose tariffs if this is justified in the future.
The background to the debate is that the big American digital companies like Facebook, Google and Amazon do not pay taxes in Europe. The EU therefore recommends a digital tax on sales at the Organization for Economic Co-operation and Development (OECD) level. The G20 panel of large industrialized and developing countries appointed the OECD in 2018 to comply with the International Digital Tax by the end of 2020. However, under US President Donald Trump, little progress has been made on this issue internationally. National programs – such as a French digital line – also created Atlantic tensions. With the inauguration of Joe Biden, Washington began to actively campaign for a minimum taxation of companies worldwide.