Notice of Determination Pursuant to Section 301: India's Digital Services Tax, 2478-2479 [2021-00362]
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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
II. Proceedings in the Investigation
On June 2, 2020, the U.S. Trade
Representative initiated an investigation
of Italy’s DST pursuant to section
302(b)(1)(A) of the Trade Act of 1974, as
amended (Trade Act). 85 FR 34709 (June
5, 2020) (notice of initiation). The notice
of initiation solicited written comments
on, inter alia, the following aspects of
Italy’s DST: Discrimination against U.S.
companies; retroactivity; and possibly
unreasonable tax policy. With respect to
tax policy, USTR solicited comments
on, inter alia, whether the DST diverges
from principles reflected in the U.S. and
international tax systems, including
extraterritoriality; taxing revenue not
income; and a purpose of penalizing
particular technology companies for
their commercial success.
Interested persons filed over 380
written submissions in response to the
notice of initiation. The public
submissions are available on
www.regulations.gov in docket number
USTR–2020–0022.
Under Section 303 of the Trade Act,
the U.S. Trade Representative requested
consultations with the Government of
Italy regarding the issues involved in
the investigation. Consultations were
held on November 10, 2020.
As noted, based on information
obtained during the investigation, USTR
has prepared and published the Italy
DST Report, which includes a
comprehensive discussion on whether
the acts, policies, and practices under
investigation are actionable under
Section 301(b) of the Trade Act. The
Italy DST Report supports findings that
Italy’s DST is unreasonable or
discriminatory and burdens or restricts
U.S. commerce.
III. Determination on the Act, Policy, or
Practice Under Investigation
Based on the information obtained
during the investigation, and taking
account of public comments and the
advice of the Section 301 Committee
and advisory committees, the U.S. Trade
Representative has made the following
determination under sections 301(b) and
304(a) of the Trade Act (19 U.S.C.
2411(b) and 2414(a)): The act, policy, or
practice covered in the investigation,
namely Italy’s DST, is unreasonable or
discriminatory and burdens or restricts
U.S. commerce, and thus is actionable
under section 301(b) of the Trade Act.
In particular:
1. Italy’s DST, by its structure and
operation, discriminates against U.S.
digital companies, including due to the
selection of covered services and the
revenue thresholds.
2. Italy’s DST is unreasonable because
it is inconsistent with principles of
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17:09 Jan 11, 2021
Jkt 253001
international taxation, including due to
application to revenue rather than
income and extraterritoriality.
3. Italy’s DST burdens or restricts U.S.
commerce.
IV. Further Proceedings
Sections 301(b) and 304(a)(1)(B) of the
Trade Act provide that if the U.S. Trade
Representative determines that an act,
policy, or practice of a foreign country
is unreasonable or discriminatory and
burdens or restricts United States
commerce, the U.S. Trade
Representative shall determine what
action, if any, to take under Section
301(b). These matters will be addressed
in subsequent proceedings under
Section 301.
Joseph Barloon,
General Counsel, Office of the United States
Trade Representative.
[FR Doc. 2021–00363 Filed 1–11–21; 8:45 am]
BILLING CODE 3290–F0–P
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
Notice of Determination Pursuant to
Section 301: India’s Digital Services
Tax
Office of the United States
Trade Representative (USTR).
ACTION: Notice.
AGENCY:
The U.S. Trade
Representative has determined that
India’s Digital Services Tax (DST) is
unreasonable or discriminatory and
burdens or restricts U.S. commerce and
thus is actionable under Section 301.
FOR FURTHER INFORMATION CONTACT: For
questions concerning the investigation,
please contact Thomas Au or Patrick
Childress, Assistant General Counsels at
(202) 395–0380 and (202) 395–9531,
respectively, Robert Tanner, Director,
Services and Investment at (202) 395–
6125, or Brendan Lynch, Deputy
Assistant U.S. Trade Representative,
South and Central Asian Affairs, 202–
395–2851.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. India’s DST
Based on information obtained during
the investigation, USTR has prepared a
comprehensive report on India’s DST
(India DST Report). The India DST
Report, which is posted on the USTR
website at https://ustr.gov/issue-areas/
enforcement/section-301-investigations/
section-301-digital-services-taxes,
includes a full description of India’s
DST. To summarize, India adopted the
operative form of its DST on March 27,
2020. India’s DST imposes a two
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Fmt 4703
Sfmt 4703
percent tax on revenue generated from
a broad range of digital services offered
in India, including digital platform
services, digital content sales, digital
sales of a company’s own goods, datarelated services, software-as-a-service,
and several other categories of digital
services. India’s DST only applies to
‘‘non-resident’’ companies. The tax
applies as of April 1, 2020.
II. Proceedings in the Investigation
On June 2, 2020, the U.S. Trade
Representative initiated an investigation
of India’s DST pursuant to section
302(b)(1)(A) of the Trade Act of 1974, as
amended (Trade Act). 85 FR 34709 (June
5, 2020) (notice of initiation). The notice
of initiation solicited written comments
on, inter alia, the following aspects of
India’s DST: Discrimination against U.S.
companies and unreasonableness as tax
policy. With respect to unreasonable tax
policy, USTR solicited comments on,
inter alia, whether the DST diverges
from principles reflected in the U.S. and
international tax systems, including
extraterritorial application and taxing
revenue rather than income.
Interested persons filed over 380
written submissions in response to the
notice of initiation. The public
submissions are available on
www.regulations.gov in docket number
USTR–2020–0022.
Under Section 303 of the Trade Act,
the U.S. Trade Representative requested
consultations with the Government of
India regarding the issues involved in
the investigation. Consultations were
held on November 5, 2020.
As noted, based on information
obtained during the investigation, USTR
has prepared and published the India
DST Report, which includes a
comprehensive discussion on whether
the acts, policies, and practices under
investigation are actionable under
Section 301(b) of the Trade Act. The
India DST Report supports findings that
India’s DST is unreasonable or
discriminatory and burdens or restricts
U.S. commerce.
III. Determination on the Act, Policy, or
Practice Under Investigation
Based on the information obtained
during the investigation, and taking
account of public comments and the
advice of the Section 301 Committee
and advisory committees, the U.S. Trade
Representative has made the following
determination under sections 301(b) and
304(a) of the Trade Act (19 U.S.C.
2411(b) and 2414(a)): The act, policy, or
practice covered in the investigation,
namely India’s DST, is unreasonable or
discriminatory and burdens or restricts
U.S. commerce, and is thus actionable
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12JAN1
Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Notices
under section 301(b) of the Trade Act.
In particular:
1. India’s DST, by its structure and
operation, discriminates against U.S.
digital companies, including due to the
selection of covered services and its
applicability only to non-resident
companies.
2. India’s DST is unreasonable
because it is inconsistent with
principles of international taxation,
including due to its application to
revenue rather than income,
extraterritorial application, and failure
to provide tax certainty.
3. India’s DST burdens or restricts
U.S. commerce.
IV. Further Proceedings
Sections 301(b) and 304(a)(1)(B) of the
Trade Act provides that if the U.S.
Trade Representative determines that an
act, policy, or practice of a foreign
country is unreasonable or
discriminatory and burdens or restricts
United States commerce, the U.S. Trade
Representative shall determine what
action, if any, to take under Section
301(b). These matters will be addressed
in subsequent proceedings under
Section 301.
Joseph Barloon,
General Counsel, Office of the United States
Trade Representative.
[FR Doc. 2021–00362 Filed 1–11–21; 8:45 am]
BILLING CODE 3290–F0–P
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
[Docket Number USTR–2019–0009]
Notice of Modification of Section 301
Action: Investigation of France’s
Digital Services Tax
Office of the United States
Trade Representative (USTR).
ACTION: Notice.
AGENCY:
The U.S. Trade
Representative has determined to
modify the action being taken in this
investigation by suspending, until
further notice, the additional duties on
products of France scheduled to take
effect on January 6, 2021.
DATES: The additional duties on
products of France are suspended
indefinitely, as of the previously
scheduled effective date of 12:01 a.m.
eastern standard time on January 6,
2021.
FOR FURTHER INFORMATION CONTACT: For
questions concerning the investigation,
please contact Thomas Au or Patrick
Childress, Assistant General Counsels at
(202) 395–0380 and (202) 385–9531,
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SUMMARY:
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19:25 Jan 11, 2021
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respectively, Robert Tanner, Director,
Services and Investment at (202) 395–
6125, or Michael Rogers, Director for
Europe at (202) 395–2684. For specific
questions on customs classification or
implementation of additional duties on
products, contact traderemedy@cbp.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On July 10, 2019, the U.S. Trade
Representative initiated the
investigation of France’s digital services
tax (DST) pursuant to section
302(b)(1)(A) of the Trade Act of 1974, as
amended (Trade Act). See 84 FR 34042
(July 16, 2019) (July 16, 2019 notice).
The July 16, 2019 notice invited public
comment on France’s DST, including
whether the tax would discriminate
against U.S. companies, the retroactive
application of the new tax, and whether
France’s DST diverged from norms
reflected in the U.S. and international
tax system. Witnesses provided
testimony at an August 19, 2019 public
hearing and interested persons filed
written submissions.
Following a request by the U.S. Trade
Representative, consultations were held
with the Government of France on
November 14, 2019.
On December 2, 2019, USTR
published a comprehensive report on
France’s DST which is available at
https://ustr.gov/issue-areas/
enforcement/section-301-investigations/
section-301-frances-digital-services-tax.
On December 6, 2019, based on the
information obtained during the
investigation and the advice of the
Section 301 Committee, and as reflected
in the December 2, 2019 report on the
findings in the investigation, the U.S.
Trade Representative published a
determination that France’s DST is
unreasonable or discriminatory and
burdens or restricts U.S. commerce, and
therefore is actionable under sections
301(b) and 304(a) of the Trade Act (19
U.S.C. 2411(b) and 2414(a)). See 84 FR
66956 (December 6, 2019) (December 6,
2019 notice).
The December 6, 2019 notice
proposed that appropriate action would
include additional ad valorem duties of
up to 100 percent on products of France
to be drawn from a list of 63 tariff
subheadings of the Harmonized Tariff
Schedule of the United States (HTSUS)
included in the annex to that notice.
The December 6, 2019 notice requested
comments on the proposed action, as
well as on other potential actions,
including the imposition of fees or
restrictions on services of France.
Witnesses provided testimony at a
January 7–8, 2020 public hearing and
interested persons filed written
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2479
comments. Transcripts from the August
2019 and January 2020 hearings are
available on the USTR website at
https://ustr.gov/issue-areas/
enforcement/section-301-investigations/
section-301-frances-digital-services-tax.
The written public submissions are
available on www.regulations.gov under
docket number USTR–2019–0009.
In a notice published on July 16,
2020, the U.S. Trade Representative
determined to impose ad valorem duties
of 25 percent on specified products of
France. See 85 FR 43292 (July 16, 2020
notice). The U.S. Trade Representative
also determined to suspend the
additional duties for up to 180 days
(that is, until January 6, 2021) to allow
additional time for bilateral and
multilateral discussions that could lead
to a satisfactory resolution of this
matter.
II. Determination To Modify Action
Section 307(a)(1) of the Trade Act
authorizes the U.S. Trade
Representative to modify or terminate
any action, subject to the specific
direction, if any, of the President with
respect to such action, that is being
taken under Section 301, if, inter alia,
the action being taken is no longer
appropriate. Pursuant to sections
301(b)–(c) and 307(a) of the Trade Act
(19 U.S.C. 2417(a)), the U.S. Trade
Representative has determined that the
imposition of duties on the current
effective date of January 6, 2021 no
longer is appropriate.
Subsequent to the initiation of this
investigation, the U.S. Trade
Representative initiated Section 301
investigations of DSTs adopted or under
consideration by Austria, Brazil, the
Czech Republic, the European Union,
India, Indonesia, Italy, Spain, Turkey,
and the United Kingdom. See 85 FR
34709 (June 5, 2020). These
investigations involve similar DST
measures, either in effect or under
consideration, in ten additional
jurisdictions. Given that these DST
investigations are ongoing and have not
yet reached any determinations on
what, if any, trade action should be
taken, the U.S. Trade Representative has
determined that it is appropriate to
suspend the action in the France DST
investigation indefinitely.
In making this determination, the U.S.
Trade Representative considered the
public comments submitted in the
investigation, as well as advice of
advisory committees.
To give effect to the U.S. Trade
Representative’s determination, the
additional duties set out in Annex A of
the July 16, 2020 notice are suspended
indefinitely, as of the scheduled
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12JAN1
Agencies
[Federal Register Volume 86, Number 7 (Tuesday, January 12, 2021)]
[Notices]
[Pages 2478-2479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00362]
-----------------------------------------------------------------------
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Notice of Determination Pursuant to Section 301: India's Digital
Services Tax
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The U.S. Trade Representative has determined that India's
Digital Services Tax (DST) is unreasonable or discriminatory and
burdens or restricts U.S. commerce and thus is actionable under Section
301.
FOR FURTHER INFORMATION CONTACT: For questions concerning the
investigation, please contact Thomas Au or Patrick Childress, Assistant
General Counsels at (202) 395-0380 and (202) 395-9531, respectively,
Robert Tanner, Director, Services and Investment at (202) 395-6125, or
Brendan Lynch, Deputy Assistant U.S. Trade Representative, South and
Central Asian Affairs, 202-395-2851.
SUPPLEMENTARY INFORMATION:
I. India's DST
Based on information obtained during the investigation, USTR has
prepared a comprehensive report on India's DST (India DST Report). The
India DST Report, which is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes, includes a full description of India's DST.
To summarize, India adopted the operative form of its DST on March 27,
2020. India's DST imposes a two percent tax on revenue generated from a
broad range of digital services offered in India, including digital
platform services, digital content sales, digital sales of a company's
own goods, data-related services, software-as-a-service, and several
other categories of digital services. India's DST only applies to
``non-resident'' companies. The tax applies as of April 1, 2020.
II. Proceedings in the Investigation
On June 2, 2020, the U.S. Trade Representative initiated an
investigation of India's DST pursuant to section 302(b)(1)(A) of the
Trade Act of 1974, as amended (Trade Act). 85 FR 34709 (June 5, 2020)
(notice of initiation). The notice of initiation solicited written
comments on, inter alia, the following aspects of India's DST:
Discrimination against U.S. companies and unreasonableness as tax
policy. With respect to unreasonable tax policy, USTR solicited
comments on, inter alia, whether the DST diverges from principles
reflected in the U.S. and international tax systems, including
extraterritorial application and taxing revenue rather than income.
Interested persons filed over 380 written submissions in response
to the notice of initiation. The public submissions are available on
www.regulations.gov in docket number USTR-2020-0022.
Under Section 303 of the Trade Act, the U.S. Trade Representative
requested consultations with the Government of India regarding the
issues involved in the investigation. Consultations were held on
November 5, 2020.
As noted, based on information obtained during the investigation,
USTR has prepared and published the India DST Report, which includes a
comprehensive discussion on whether the acts, policies, and practices
under investigation are actionable under Section 301(b) of the Trade
Act. The India DST Report supports findings that India's DST is
unreasonable or discriminatory and burdens or restricts U.S. commerce.
III. Determination on the Act, Policy, or Practice Under Investigation
Based on the information obtained during the investigation, and
taking account of public comments and the advice of the Section 301
Committee and advisory committees, the U.S. Trade Representative has
made the following determination under sections 301(b) and 304(a) of
the Trade Act (19 U.S.C. 2411(b) and 2414(a)): The act, policy, or
practice covered in the investigation, namely India's DST, is
unreasonable or discriminatory and burdens or restricts U.S. commerce,
and is thus actionable
[[Page 2479]]
under section 301(b) of the Trade Act. In particular:
1. India's DST, by its structure and operation, discriminates
against U.S. digital companies, including due to the selection of
covered services and its applicability only to non-resident companies.
2. India's DST is unreasonable because it is inconsistent with
principles of international taxation, including due to its application
to revenue rather than income, extraterritorial application, and
failure to provide tax certainty.
3. India's DST burdens or restricts U.S. commerce.
IV. Further Proceedings
Sections 301(b) and 304(a)(1)(B) of the Trade Act provides that if
the U.S. Trade Representative determines that an act, policy, or
practice of a foreign country is unreasonable or discriminatory and
burdens or restricts United States commerce, the U.S. Trade
Representative shall determine what action, if any, to take under
Section 301(b). These matters will be addressed in subsequent
proceedings under Section 301.
Joseph Barloon,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2021-00362 Filed 1-11-21; 8:45 am]
BILLING CODE 3290-F0-P