The Office of the United States Trade Representative said on Wednesday that after Washington and New Delhi reached an agreement on a transitional arrangement for a global tax agreement that would abolish India’s digital service tax, the Office of the United States Trade Representative will terminate its trade retaliation lawsuit against India.
The Office of the United States Trade Representative stated that the agreement between the U.S. Treasury Department and the Indian Treasury Department applies the same terms as Austria, the United Kingdom, France, Italy, Spain and Turkey, but the implementation date is a little later.
The agreement follows the October agreement of 136 countries to cancel their digital service tax in principle, as part of the comprehensive global taxation agreement reached on October 8. Tax market countries.
These countries have agreed not to levy new digital service taxes before the implementation of the OECD tax agreement by the end of 2023, but they need to make arrangements with seven countries with existing digital taxes. The existing digital taxes in these countries are mainly targeted at US technology giants. Including Google, Facebook and Amazon. .
The agreement between Washington and New Delhi brought all seven countries into a transitional arrangement, which was reached after U.S. Trade Representative Catherine Tay concluded his visit to India to discuss strengthening cooperation in agricultural and other commodity trade.
Under the agreed withdrawal terms, these countries can continue to levy digital service taxes until the new system is put in place. However, for Turkey and European countries, any taxes levied after January 2022 that exceed the company’s obligation to pay under the new rules will be included in the future tax obligations of companies in these countries.
The Office of the United States Trade Representative stated that for India, the start date of these credits has been postponed to April 1, 2022. If the OECD tax agreement is not implemented by that time, it will be extended for three months after the end of 2023.