Lobbyists representing America’s largest internet companies called on the United States to negotiate the elimination of taxes on digital services charged by countries ranging from the United Kingdom to India, and at least one of them supports the tariffs of reprisal.
The levies imposed by Austria, India, Italy, Spain, Turkey and the United Kingdom cost US companies $ 3.1 billion, Rachael Stelly, a lawyer for the Computer and Communications Industry Association, said Monday in a hearing with the Office of the U.S. Trade Representative Members of the group include some of the largest online firms, such as Amazon.com Inc. and Facebook Inc.
The hearing is the first in a series planned for this week, as the country’s trade office evaluates whether it will apply retaliatory tariffs to countries under section 301 of the 1974 Trade Act, which could total an amount close to US $ 1 billion a year. Products entering the US, from Italian ties and Spanish shoes to Turkish kilim rugs and British beauty products, could face tariffs of up to 25% annually.
The Organization for Economic Cooperation and Development has been trying since 2015 to negotiate a global agreement on how to collect profits from companies with little or no physical presence in the markets where they do business, and is aiming to do so by the middle of this year. . But countries are frustrated with the slow progress of the negotiations and began to move forward with their own unilateral measures in 2019.
Taxes present a significant administrative burden, say industry representatives, because companies must meet specific compliance requirements for each national tax, and tech groups are alarmed as the number of requirements increases. The US government should engage with other countries considering their own digital taxes, including Brazil, Canada and Vietnam, said Jordan Haas, director of trade policy for the Internet Association, which also represents companies in the industry.