The US Trade Representative said Wednesday that Washington and New Delhi are working to end a trade retaliation lawsuit against India after they have agreed to a global tax transaction transition agreement to withdraw India’s digital services tax.
The USTR said the agreement between the US Treasury and the Indian Treasury applies the same terms as those agreed with Austria, the United Kingdom, France, Italy, Spain and Turkey, but with a slightly later implementation date. ..
The agreement, in principle, follows the October agreement of 136 countries, withdraws the digital services tax as part of the large-scale global tax transaction agreed on October 8, and adopts a global minimum corporate tax of 15%. , Grants taxation rights to large, profitable corporations. Country of the market.
Countries have agreed not to impose a new digital services tax before the OECD tax system comes into force by the end of 2023, but primarily targeting U.S. technology giants such as Google, Facebook and Amazon.com. We had to make arrangements with the seven countries that had existing digital taxes. ..
The agreement between Washington and New Delhi brought all seven countries into a transition agreement, after US Trade Representative Katherine Tai finished her trip to India to discuss strengthening trade cooperation on agricultural and other commodities. It was done.
Under the agreed withdrawal conditions, countries can continue to collect digital service taxes until a new system is introduced. However, in the case of Turkey and European countries, if the tax collected after January 2022 exceeds the amount that the company must pay under the new rules, it will be subject to future tax obligations of the company in those countries. Will be deducted.
The USTR told India that the start date for these credits will be postponed to April 1, 2022, and will be extended by three months from the end of 2023 if OECD tax transactions are not conducted by that time.