The deal between Washington and New Delhi brings all seven countries into a transition regime
The Office of the US Trade Representative said on Wednesday that it is moving to end its trade retaliation case against India, as Washington and New Delhi have agreed a global tax deal transition arrangement that will reduce India’s digital services tax. will take it back.
The USTR said the agreement between the US Treasury and India’s Ministry of Finance applies on similar terms agreed with Austria, Britain, France, Italy, Spain and Turkey, but with a slightly later implementation date.
The agreement follows an October agreement by 136 countries to in principle withdraw their digital services taxes as part of a broader global tax deal. On 8 October it agreed to adopt a 15 percent global minimum corporate tax and to provide certain tax rights on large profitable companies. market country.
Prior to the implementation of the OECD tax deal by the end of 2023, countries agreed not to impose a new digital services tax, but were required to make arrangements with the seven countries that had existing digital taxes, primarily Google, were targeting US technology giants including Facebook and Amazon.com. ,
The deal between Washington and New Delhi brings all seven countries into a transition arrangement and came after US Trade Representative Catherine Tai concluded a visit to India to discuss expanding trade cooperation on agriculture and other commodities.
Under agreed withdrawal terms, countries can continue to collect digital service tax until the new regime comes into force. But for Turkey and European countries, any tax collected after January 2022 that companies must pay under the new rules will be credited against future tax liabilities of firms in those countries.
The USTR said that for India, the starting date for those credits was pushed back to April 1, 2022, with a three-month extension from the end of 2023 if the OECD tax deal doesn’t come into force by that time.
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