The digital taxes of Austria, India, Italy, Spain, Turkey and the United Kingdom would discriminate against and burden US companies.
The US government is threatening Austria and five other states with punitive tariffs because of their digital taxes. This is according to a notice published on Friday afternoon (local time) by the US Trade Representative Katherine Tai. The digital taxes of Austria, India, Italy, Spain, Turkey and the United Kingdom would discriminate against and burden US companies. They also do not comply with international tax principles.
Tai stressed that the US continued to work for an “international consensus” on the relevant tax issues within the OECD. In the meantime, Washington would keep its options open, “including the imposition of tariffs”. The US investigations against Brazil, the Czech Republic, the EU and Indonesia would be suspended because they had not decided on digital taxes, it said.
The investigations had been initiated last June, still under US President Donald Trump. A few days before the end of office, Tai’s predecessor Robert Lightizer published Trump’s reports in which the thumb was lowered over the tax plans of Austria and the five other states. On the basis of these reports, the government of the new US President Joe Biden is now specifically threatening punitive tariffs.
Tax on online advertising revenue
In Austria, a tax on online advertising revenues has been levied since the previous year, which is aimed in particular at US Internet giants such as Google, Apple or Facebook. The federal government makes no secret of the fact that it wants to ask US corporations to pay more, which in the US is seen as discrimination.
Federal Chancellor Sebastian Kurz (ÖVP) is also a great admirer of Silicon Valley and tries to maintain a good relationship with the company captains there. He regularly uses opportunities to meet and talk to Apple CEO Tim Cook.
A few hours before the US tax ruling became known, Kurz published a photo on Friday morning showing him at a video conference with Cook on a MacBook. “Thank you Tim Cook for taking the time to continue our discussions on digitization and technological trends,” wrote the Chancellor. “In our plan to better return from the current Covid-19 crisis, a strengthening of the digital infrastructure and capabilities will be essential for Austria and the EU.”