US trade chief tells Turkey countries must remove digital services taxes

Reuters

U.S. Trade Representative Katherine Tai told Turkey's trade minister it was critical that countries remove individual digital services taxes in connection with a broader multilateral agreement reached in talks led by the OECD, her office said.

Tai discussed digital services taxes, improving access for U.S. companies in Turkey and other issues with her Turkish counterpart, Mehmet Muş, during a virtual meeting on Aug. 25, her office said in a statement released the next day.

"Ambassador Tai stated that the United States views as critical the removal of individual DSTs in connection with the Organization for Economic Co-operation and Development (OECD) and G20 processes," it said.

She expressed her view that negotiations in multilateral forums represent the best opportunity to resolve issues around digital services taxes.

More than 130 OECD members agreed this summer to work out new rules on where companies are taxed, to adopt a tax rate of at least 15%, and to drop national digital services taxes in favor of the new taxing rights.

G20 leaders are trying to finalize the deal by an Oct. 28-29 summit in Rome.

The U.S. Trade Representative's office in June announced 25% tariffs on over $2 billion worth of imports from six countries over their digital services taxes - including Turkey - but immediately suspended the duties to allow time for international tax negotiations to continue.

The U.S. government has concluded that such individual taxes would discriminate against U.S. companies.

During their meeting, Tai and Muş also discussed tackling challenges posed by non-market economies, with a particular focus on excess capacity, and efforts to reform the World Trade Organization, USTR said.