Washington on Wednesday said that decisions by India, Italy and Turkey to tax local revenue of Internet giants such as Facebook Inc discriminates against US companies, but it would not be taking action against the countries for now.
The taxes are “inconsistent with prevailing principles of international taxation, and burden or restricts US commerce,” the office of the US Trade Representative (USTR) said in a statement.
While it would not retaliate now, the office would “continue to evaluate all available options,” it said.
The countries are among several that have instituted so-called digital services taxes, or levies on local sales of companies, including Alphabet Inc’s Google.
In June last year, the office started investigations into the moves of at least 10 countries, citing Section 301 of the US Trade Act of 1974, which allows it to retaliate for trade practices it deems unfair.
It is the same tool used to justify US tariffs on Chinese goods for alleged theft of intellectual property.
Should the US impose duties on imports from the countries, it likely would be up to the administration of US president-elect Joe Biden to implement that decision, as time is running out for the current USTR to prepare tariff lists and go through a public comment period before the duties take effect.
Plans for a digital-tax agreement brokered by the Organisation for Economic Co-operation and Development (OECD) have been delayed until at least the summer after it became clear that the initial deadline of reaching a deal last year would not be met.
The goal had been to replace individual country’s digital taxes with a global plan.
Without an OECD agreement, countries are going ahead with their own versions of the taxes, which could result in a worldwide retaliatory tax and tariff war between the US and nations that want a share of the taxes from US tech giants’ revenue.
Belgium, Norway and Latvia are among nations that could introduce digital services taxes this year, while Spain and the Czech Republic start collecting the tax this month.
The US on Wednesday was due to start charging a 25 percent levy on imports of French makeup, handbags and soap worth about US$1.3 billion annually in retaliation for the European country’s tax on the revenue of US tech companies.
The original annual value of goods to be targeted was US$2.4 billion.
France implemented its tax on digital revenue in 2019 to put pressure on the talks to advance, but Washington said that the unilateral move unfairly targeted US companies.
In January last year, French President Emmanuel Macron and US President Donald Trump agreed a truce in their dispute to give time for the international negotiations to reach a global deal, but the talks stumbled in October and France resumed collecting the tax in the middle of last month.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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