US announces delayed tariffs on six countries that tax digital goods

AppleInsider

The U.S. has introduced new suspended tariffs against six countries that have target tech giants by implementing digital services taxes, the office of the U.S. Trade Representative said.

Credit: Apple

Austria, India, Italy, Spain, Turkey, and the U.K. will be subject to the tariffs. They're set at 25% on about $2 billion worth of goods, though they won't take effect for 180 days while the U.S. continues to negotiate on a proposed global tax regime.

"The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today's actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future," U.S. Trade Representative Katherine Tai said in a statement Wednesday

The U.S. government in April signaled plans to enact retaliatory tariffs on countries that tax digital goods from American companies, including the Apple App Store.

The six countries included in the USTR's list charge anywhere from a 2% to 5% tax on digital services. Although the specifics vary by country, the taxes cover areas such as social media, digital marketplaces, advertising, and search engines.

Foreign countries have long complained that American tech giants like Apple, Google, and Facebook should pay more in taxes. The U.S. response reflects its opposition to what it sees are discriminatory policies targeting successful companies.

The delayed tariffs announced Wednesday will affect a number of different consumer products, including cosmetic items, clothing, video game consoles, carpets, and shrimp, among other imports.

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sflocal

Good.  If they're going to single out American companies for doing a better job than they're doing, then us doing exactly the same thing to them is fair and just.  

avon b7

sflocal said:

Good.  If they're going to single out American companies for doing a better job than they're doing, then us doing exactly the same thing to them is fair and just.  

No one is singling out anyone. The US can do whatever it wants on tariffs in line with the rules but sovereign nations can obviously do the same. 

mknelson

sflocal said:

Good.  If they're going to single out American companies for doing a better job than they're doing, then us doing exactly the same thing to them is fair and just.  

Doing better at… avoiding paying local taxes by setting up the regional office in a tax haven?

YOU pay the duties, not the Europeans. They may lose a bit of business.

In the long run the proposed global tax regime seems like a better solution all around. Level the playing field and reduce the race to the bottom.

Wgkrueger

One wonders why EU based corporations aren’t dominant in the EU. 

dewme

Wgkrueger said:

One wonders why EU based corporations aren’t dominant in the EU. 

Only if one does not look beyond the narrow scope of businesses and markets mentioned in this article. If one expands one’s observations to include automotive, heavy machinery, industrial automation, industrial robotics, power generation, packaging machinery, medical devices, mining equipment, pharmaceuticals, chemicals, etc., you’ll see that EU corporations do quite well on their home turf. 

I’m with MKnelson on this as far as having widely scoped if not global level mechanisms to work through these issues instead of the Hunger Games approaches that currently prevail. 

FileMakerFeller

Hmm. So the US reserves the right to impose tariffs on other countries that impose special requirements on multinationals headquartered in the US because <insert reasons here> yet domestically there's a push to place different special requirements on those same companies.

sunman42

I strongly suspect that if Apple, Google, or Facebook were incorporated in the EU, there would be minimal taxation of them.

laytech

Double standards. If everyone was paying the correct taxes they owed, countries would be a lot better off and we should all have better services such as health care etc. sadly the rich and powerful are the ones most likely to avoid paying all the taxes they owe and that includes corporations. 

crowley

Wgkrueger said:

One wonders why EU based corporations aren’t dominant in the EU. 

Digital companies get power and sway from scale. It’s hard to build power and scale in a market that spans dozens of languages and cultures. The USA’s (relative) monoculture across a large population is a definite advantage in growing big companies.

dewme

laytech said:

Double standards. If everyone was paying the correct taxes they owed, countries would be a lot better off and we should all have better services such as health care etc. sadly the rich and powerful are the ones most likely to avoid paying all the taxes they owe and that includes corporations. 

Except that individual countries, and even localities all the way down to the city level, use ‘tax incentives’ to lure companies into establishing operations in their locale. This is a classic zero sum game, or Hunger Games, approach that pits one locale against the other. Locales that are benefiting from the incentives want to preserve what they have and locales that are missing out want to level the playing field, at least in cases where they are on the losing end of the deal. If someone legally waves cold hard cash in your face and you have to answer to shareholders and a board of directors, you’re going to take the cash.  

reroll

Why is everyone talking about the EU? Only half of the mentioned countries are there. Also I am pretty sure this is all going away with the new global tax agreement. This has long been in discussions but not much could be achieved under the previous administration.