WASHINGTON (Reuters) – The U.S. government on Wednesday announced it was suspending punitive tariffs on Britain, India and four European countries for six months as it worked to resolve a dispute over taxes on digital services.
The move comes after a year-long investigation into taxes that Washington says discriminate against big US tech companies like Apple, Amazon, Google and Facebook.
The 25 percent tariff was never imposed, but also targeted Austria, Italy, Spain and Turkey.
While trade authorities ruled that the tariffs were justified, “The United States is focused on finding a multilateral solution to a series of key international tax issues, including our concerns about taxes on services. digital, ”said United States Trade Representative (USTR) Katherine Tai in a statement. President Joe Biden’s administration is pushing for a global minimum corporate tax of 15 percent that aims to solve the problem of companies sheltering profits in low-tax countries.
The move comes just ahead of a two-day meeting in London from Friday of finance ministers from the Group of Seven rich countries to reach a deal on the tax issue.
Officials would then try to gain broader support from the G20 and the 38 members of the Organization for Economic Co-operation and Development (OECD) who have spearheaded the tax harmonization effort.
However, Ireland, which has become a haven for many multinationals, has expressed opposition to the global minimum tax.
G7 leaders will meet later in June, following a meeting of G20 finance ministers in July.
Committed to a solution
The USTR has made it clear that it still has the option of imposing punitive tariffs on products from countries that have adopted digital service taxes.
“The United States remains committed to reaching consensus on international tax issues through the OECD and G20 processes,” Tai said. “Today’s actions allow time for these negotiations to continue moving forward while retaining the ability to impose tariffs… if warranted in the future.”
The so-called Section 301 inquiry ruled that the tax “discriminates against US businesses, is inconsistent with existing international tax and charge principles, or restricts US trade.” The USTR also suspended 25% tariffs on $ 1.3 billion of French goods in January imposed in the dispute.
In March, the USTR ended investigations into Brazil, the Czech Republic, the European Union and Indonesia after those governments failed to implement a digital services tax.