US probes digital services taxes

The United States Trade Representative (USTR) on Tuesday initiated investigation into digital services taxes (DST) that have been either adopted or are being considered by 10 of its trading partners. Section 301 of Trade Act that allows authorities to respond to a foreign country’s action, considered unfair or discriminatory and negatively affects US trade. Besides India, the authorities are investigating other countries like Austria, Brazil, the Czech Republic, the European Union, Indonesia, Italy, Spain, Turkey, and the United Kingdom.

“We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination,” said USTR Robert Lighthizer in a statement. In the context of India, which had adopted a  2% DST in March, USTE said “The tax only applies to non-resident companies, and covers online sales of goods and services to, or aimed at, persons in India. The tax applies only to companies with annual revenues in excess of approximately Rs. 20 million (approximately US$ $267,000). The tax went into effect on April 1, 2020.”