On Friday 26 March, the Office of the United States Trade Representative (USTR) announced that it was ending the Section 301 investigation into the European Union’s proposed digital levy (see EUROPE 12498/27), which began in June 2020.
The European Union had not adopted the proposed tax at the time the investigation was launched, the statement said. The same applies to the Czech Republic, and so that investigation will also be terminated.
The European communication issued in the last few days promising that the proposed digital levy will be compatible with the solutions reached at the OECD has undoubtedly helped calm the situation (see EUROPE 12685/25).
However, if any of these jurisdictions adopts or introduces a tax on digital services, the USTR reserves the right to begin new investigations, it states.
With regard to the taxes on digital services adopted by Austria, Italy and Spain, which have been found to discriminate against American digital companies (see EUROPE 12636/26), the USTR is continuing the public notice and comment process with regard to the actions that could be taken.
“The United States remains committed to reaching an international consensus through the OECD process on international tax issues. However, until such a consensus is reached, we will maintain our options under the Section 301 process, including, if necessary, the imposition of tariffs”, said the USTR.
The USTR’s decision can be found at: https://bit.ly/2O1iG5t (Original version in French by Marion Fontana)