UK, France, Italy, Austria and Spain announce digital services tax repeal – JURIST – News



A joint statement by the UK, France, Italy, Austria and Spain was published Thursday announcing that there would be a repeal of their “taxes on digital services” (DST).

This follows an agreement with the five countries and the Treasury Department in collaboration with the OECD regarding the section 301 tariffs relating to the digital services tax. In the repealed agreement, European countries will implement existing “unilateral measures” for an interim period.

Item 301 tariffs will affect French handbags, Austrian glassware and UK cosmetics. The press release also touched on the transition period. Additional requirements for one year after the entry into force of pillar 1 will oblige the countries concerned to credit any excess tax by the amount of pillar 1 over the part of corporation tax payable.

Full implementation of DSTs in a global tax deal will come into effect in 2023. However, it is expected that countries will retain their own unilateral measures for DSTs until then. The United States Trade Representative (USTR) aims to work with the five governments to oversee the implementation of the agreement. The USTR investigation began in June 2020 and initially covered other countries such as India and Turkey, but they chose not to join the deal.


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