U.S. trade representative: the U.S. has withdrawn from the U.S. – European digital service tax negotiations


Sina Technology News in the early morning of June 18 Beijing time, US trade representative Robert Lighthizer said on Wednesday that there was no progress in the digital service tax negotiations between the US and Europe, and US Treasury Secretary Steven mnuchin had decided to withdraw from the negotiations.
At a hearing held by the ways and Means Committee of the U.S. House of Representatives, Mr. lethezer said he still believed that an international mechanism was needed to deal with tax issues, but the negotiations between the U.S. and European countries failed to yield results. “We haven’t made any progress, and the finance minister decided that instead of waiting for them to exit the negotiations themselves, we’d better say no more,” he said
A spokesman for the US Treasury has yet to comment.
Leitzer’s comments mean that an earlier report by the financial times was officially confirmed for the first time, according to which mnuchin sent a letter to senior French, Spanish, British and Italian officials on June 12, proposing to suspend negotiations.
Earlier this month, lethezer launched an investigation to determine whether the digital service tax that Austria, Brazil, Czech Republic, EU, India, Indonesia, Italy, Spain, Turkey and the United Kingdom are adopting or considering constitutes unfair trade; if the answer is yes, the United States government may impose new tariffs on them. The United States had previously taken action on France’s digital services tax, but France later agreed to suspend it, while the OECD countries developed a more standardized approach.
Some countries believe that a digital services tax could allow them to get more tax revenue from the local businesses of large technology companies such as alphabet’s Google and Facebook. Critics say the companies have made huge profits in European markets, but have made limited contributions to taxes.
Spain insists that the digital tax it is considering will not vary from country to country and will apply to companies headquartered in any country. “Spain believes it is necessary to adapt its financial system to the new economic realities of the 21st century; that was our position before we received the letter, and it is still the case now,” a government source said (Tang Feng)