In response to a written question from MEPs Inma Rodríguez-Piñero (S&D, Spain), Paolo De Castro (S&D, Italy) and Alícia Homs Ginel (S&D, Spain), EU Commissioner for Trade Valdis Dombrovskis said on Wednesday 28 July that the World Trade Organization (WTO) dispute settlement system is “the only acceptable route” to challenging EU digital levies.
In June, the United States Trade Representative (USTR) concluded that taxes on digital services adopted by Spain, Italy and Austria discriminated against US trade.
As a result, the USTR had announced its intention to impose an additional 25% tariff on certain imports from these countries, but to suspend it immediately until 29 November 2021 to give the international tax reform negotiations underway at the OECD a chance to succeed.
In his response, Valdis Dombrovskis said that he is closely following these investigations as well as the one launched on the French digital levy (see EUROPE 12631/4) and stressed that any US investigation must be in line with international law and, in particular, the WTO agreements. In doing so, he reiterated that the EU would respond in a united manner to any US trade sanctions that were incompatible with WTO rules.
The EU’s proposed digital levy had also come under US scrutiny, but the US finally decided to close its investigation in March 2021 (see EUROPE 12688/23). However, US pressure led the European Commission to announce in July that it would suspend its proposal until the autumn to support the finalisation of the agreement on international tax reform (see EUROPE 12760/15).
Valdis Dombrovskis notes that the EU and the United States confirmed their support for this agreement at the G20 Finance Summit in July (see EUROPE 12757/17). However, the latter provides for the end of all national taxes on digital services.
See the written answer: https://bit.ly/3fbFhXy (Original version in French by Marion Fontana)