Karimi & Associates Law Firm presents according to The U.S. Department of the treasury:
The United Kingdom, France, Italy, Austria, and Spain have declared in a joint statement that there would be a repeal of their ‘Digital Services Taxes’.
The joint statement is based on an agreement between the five countries and the U.S Department of the Treasury in accordance with the Organization for Economic Co-operation and Development “OECD” provisions and in relation to section 301 tariffs relating to digital service tax. According to the repealed agreement, the European countries will implement the existing ‘Unilateral Measures’ during an interim period.
The section 301 tariffs will affect France’s handbags, Austria’s glassware, and beauty products from the UK. The press statement outlined the Transitional period as well. A year after Pillar 1 takes effect, further requirements will require the involved countries to credit any excess tax from the Pillar 1 amount against the portion of the corporate income tax liability.
The full implementation of Digital Services Taxes in a global tax agreement will take effect in 2023. It is to be noted that the countries will keep their own unilateral measures for Digital Services Taxes until then. The United States Trade Representative (USTR) aims to work with the five governments to oversee the implementation of the agreement. The USTR will investigate the process from June 2020 and had initially covered additional countries such as India and Turkey, but they chose not to join the agreement.