Proposed Action in Section 301 Investigation of Austria's Digital Services Tax, 16816-16819 [2021-06625]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 86, Number 60 (Wednesday, March 31, 2021)]
[Notices]
[Pages 16816-16819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06625]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2021-0002]


Proposed Action in Section 301 Investigation of Austria's Digital 
Services Tax

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments and notice of public hearing.

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SUMMARY: The Office of the United States Trade Representative (USTR) 
requests written comments regarding a potential trade action in 
connection with the Section 301 investigation of Austria's Digital 
Services Tax (DST). USTR also will convene virtual public hearings and 
accept rebuttal comments in relation to the potential action.

DATES: 
    April 21, 2021: To be assured of consideration, submit requests to 
appear at a hearing, along with a summary of the testimony, by this 
date.
    April 30, 2021: To be assured of consideration, submit written 
comments by this date.
    May 3, 2021: Multi-jurisdictional virtual hearing on proposed 
actions.
    May 10, 2021: To be assured of consideration, submit multi-
jurisdictional hearing rebuttal comments by this date.
    May 11, 2021 at 9:30 a.m.: Virtual hearing on Austria DST proposed 
action.
    May 18, 2021: To be assured of consideration, submit Austria DST 
hearing rebuttal comments by this date.

ADDRESSES: Submit documents in response to this notice, including 
written comments and hearing appearance requests, through the online 
USTR portal: https://comments.ustr.gov/s/.

FOR FURTHER INFORMATION CONTACT: For questions concerning the 
investigation, please contact Ben Allen or Patrick Childress, Assistant 
General Counsels at (202) 395-9439 and (202) 395-9531, respectively; 
Robert Tanner, Director, Services and Investment at (202) 395-6125; or 
Michael Rogers, Director, Europe and the Middle East at (202) 395-2684. 
For issues with on-line submissions, please contact the USTR Section 
301 line at (202) 395-5725.

SUPPLEMENTARY INFORMATION:

I. Proceedings in the Investigation

    Austria has adopted a DST that imposes a 5% tax on gross revenues 
from digital advertising services provided in Austria. The DST applies 
only to companies with annual global revenues of [euro]750 million or 
more, and annual revenues from digital advertising services in Austria 
of [euro]25 million or more.
    On June 2, 2020, the U.S. Trade Representative initiated an 
investigation of Austria's DST pursuant to section 302(b)(1)(A) of the 
Trade Act of 1974, as amended (Trade Act). See 85 FR 34709 (June 5, 
2020) (notice of initiation). The notice of initiation solicited 
written comments on, inter alia, the following aspects of Austria'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 diverged 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. 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 Austria regarding the 
issues involved in the investigation. Consultations were held on 
December 21, 2020.
    Based on information obtained during the investigation, USTR 
prepared a comprehensive report on Austria's DST (Austria DST Report). 
The Austria DST Report is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes. The report includes a full description of 
Austria's DST, and supports findings that Austria's DST is unreasonable 
and discriminatory and burdens or restricts U.S. commerce.
    On January 14, 2021, based on the information obtained during the 
investigation and the advice of the Section 301 Committee, the U.S. 
Trade Representative determined that Austria'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 86 FR 6406 (January 21, 2021).

II. Proposed Action

    Section 301(b) provides that upon determining that the acts, 
policies, and practices under investigation are actionable and that 
action is appropriate, the U.S. Trade Representative shall take all 
appropriate

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and feasible action authorized under section 301(c), subject to the 
specific direction, if any, of the President regarding such action, and 
all other appropriate and feasible action within the power of the 
President that the President may direct the U.S. Trade Representative 
to take under section 301(b), to obtain the elimination of that act, 
policy, or practice.
    Section 301(c)(1)(B) of the Trade Act authorizes the U.S. Trade 
Representative to impose duties on the goods of the foreign country 
subject to the investigation. Pursuant to sections 301(b) and (c), USTR 
proposes that the U.S. Trade Representative should determine that 
action is appropriate and that appropriate action would include the 
imposition of additional ad valorem tariffs on certain products of 
Austria.
    In particular, USTR proposes to impose additional tariffs of up to 
25 percent ad valorem on an aggregate level of trade that would collect 
duties on goods of Austria in the range of the amount of the DST that 
Austria is expected to collect from U.S. companies. Initial estimates 
indicate that the value of the DST payable by U.S.-based company groups 
to Austria will be up to approximately $45 million per year.
    USTR further proposes that the goods of Austria subject to 
additional tariffs would be drawn from the preliminary list of products 
in the Annex to this notice, as specified by the listed eight-digit 
tariff subheadings.

III. Request for Public Comments

    In accordance with section 304(b) of the Trade Act (19 U.S.C. 
2414(b)), USTR invites comments from interested persons with respect to 
whether action is appropriate, and if so, the appropriate action to be 
taken.
    USTR requests comments with respect to any issue related to the 
action to be taken in this investigation. With respect to the proposed 
tariff action outline above, USTR specifically invites comments 
regarding:
     The level of the burden or restriction on U.S. commerce 
resulting from Austria's DST, including the amount of DST payments owed 
by U.S. companies, the annual growth rate of such payments, and other 
effects, such as compliance costs.
     The appropriate aggregate level of trade to be covered by 
additional duties.
     The level of the increase, if any, in the rate of duty.
     The specific products to be subject to increased duties, 
including whether the tariff subheadings listed in the Annex should be 
retained or removed, or whether tariff subheadings not currently on the 
list should be added.
    In commenting on the inclusion or removal of particular products on 
the preliminary list of products subject to the proposed additional 
duties, USTR requests that commenters specifically address whether 
imposing increased duties on a particular product would be practicable 
or effective to obtain the elimination of Austria's acts, policies, and 
practices, and whether imposing additional duties on a particular 
product would cause disproportionate economic harm to U.S. interests, 
including small- or medium-size businesses and consumers.
    Simultaneously with this notice, USTR also is requesting public 
comments on proposed trade actions in five other DST investigations 
initiated at the same time as the Austria DST investigation. Certain 
interested persons may wish to provide written comments or oral 
testimony on multi-jurisdictional issues common to two or more 
investigations. To avoid duplication, the USTR portal will have a 
separate docket for multi-jurisdictional submissions, and USTR will 
hold a separate multi-jurisdictional hearing.
    To be assured of consideration, you must submit written comments on 
the proposed action by April 30, 2021, and post-hearing rebuttal 
comments by May 10, 2021 for the multi-jurisdictional hearing, and by 
May 18, 2021 for the Austria DST hearing.

IV. Hearing Participation

    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to the Austria DST proposed action on May 11, 2021, 
beginning at 9:30 a.m. Those requesting to appear at this hearing 
should have comments applicable only to the Austria DST proposed 
action.
    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to multiple jurisdictions on May 3, 2021, beginning 
at 9:30 a.m. Those requesting to appear at the multi-jurisdictional 
hearing should have comments that are applicable to two or more DST 
investigations.
    For either hearing, you must submit a request to appear at the 
specific hearing using the electronic portal at https://comments.ustr.gov/s/. You will be able to view a docket entitled 
`Request to Appear at Hearing on Proposed Action in Section 301 
Investigation of Austria's Digital Services Tax.' Requests to appear 
must include a summary of testimony, and may be accompanied by a pre-
hearing submission. Remarks at the hearing are limited to five minutes 
to allow for possible questions from the Section 301 Committee. All 
submissions must be in English. To be assured of consideration, USTR 
must receive your request to appear by April 21, 2021.

V. Procedures for Written Submissions

    You must submit written comments, rebuttal comments, and requests 
to appear at the hearing using the electronic portal at https://comments.ustr.gov/s. You will be able to view a docket entitled 
`Comments Concerning Proposed Action in Section 301 Investigation of 
Austria's Digital Services Tax' on the portal, docket number USTR-2021-
0002.
    You do not need to establish an account to submit comments. Fields 
with a gray (BCI) notation are for Business Confidential Information 
and the information entered will not be publicly available. Required 
fields are marked `Required' and will have a red asterisk (*). Fields 
with a green (Public) notation will be viewable by the public.
    The first screen of the portal requires you to enter identification 
and contact information. Third party organizations such as law firms, 
trade associations, or customs brokers, should identify the full legal 
name of the organization they represent, and identify the primary point 
of contact for the submission. The remaining fields of the form are 
optional.
    After entering the identification and contact information, you can 
complete the remainder of the questionnaire, or any portion of it by 
clicking `Next.' You can comment on multiple products in a single 
entry, or submit multiple comments. You will be able to navigate 
through each screen of the form by clicking `Next,' with or without 
entering a response to each field on an individual screen or page. 
Additionally, you will be able to upload documents at the end of the 
form and designate whether USTR should treat the documents as business 
confidential or public information.
    For uploads containing BCI, the file name of the business 
confidential version should begin with the characters `BCI'. Any page 
containing BCI must be clearly marked `BUSINESS CONFIDENTIAL' on the 
top of that page and the submission should clearly indicate, via 
brackets, highlighting, or other means, the specific information that 
is BCI. If you request business confidential treatment, you must 
certify in writing that disclosure of the information would endanger 
trade secrets or profitability, and that the information would not 
customarily be released to the public. Parties uploading attachments 
containing BCI also must

[[Page 16818]]

submit a public version of their comments. The file name of the public 
version, which must be uploaded on https://comments.ustr.gov/s/, should 
begin with the character `P'. The `BCI' and `P' should be followed by 
the name of the person or entity submitting the comments or rebuttal 
comments. If these procedures are not sufficient to protect BCI or 
otherwise protect business interests, please contact the USTR Section 
Hotline 301 line at (202) 395-5725 to discuss whether alternative 
arrangements are possible. USTR will post attachments uploaded to the 
docket for public inspection, except for attachments marked as business 
confidential.
    You can view all public submissions on the USTR portal at https://comments.ustr.gov/s.

Greta Peisch,
General Counsel, Office of the United States Trade Representative.

Annex

    Note: All products that are classified in the eight-digit 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS) that are listed in this Annex are covered by the proposed 
action. The product descriptions that are contained in this Annex 
are provided for informational purposes only, and are not intended 
to delimit in any way the scope of the proposed action. Any 
questions regarding the scope of a particular HTSUS subheading 
should be referred to U.S. Customs and Border Protection. In the 
product descriptions, the abbreviation ``nesoi'' means ``not 
elsewhere specified or included''.


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      HTSUS subheading                   Product description
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4107.99.70.................  Bovine (not buffalo) and equine leather,
                              not whole, nesoi, without hair on, not
                              fancy, prepared after tanning or crusting,
                              not heading 4114.
4203.40.60.................  Clothing accessories of leather or of
                              composition leather, nesoi.
4205.00.80.................  Articles of leather or of composition
                              leather, nesoi, excluding reptile leather.
5209.12.00.................  Unbleached 3- or 4-thread twill fabrics of
                              cotton, including cross twill, 85 percent
                              or more cotton by weight, weighing more
                              than 200 g/m2.
5402.49.91.................  Other yarns, monofil; multifil, untwisted
                              or twisted > or = to 5, not exceeding 50
                              turns per meter of other synthetic, not
                              for retail sale.
5404.19.10.................  Racket strings of synthetic monofilament of
                              67 decitex or more and of which no cross-
                              sectional dimension exceeds 1 mm.
5404.19.80.................  Synthetic monofilament (exc.
                              polypropylene), of 67 decitex or more and
                              with no cross-sectional dimension > 1 mm,
                              nesoi.
5603.94.10.................  Nonwoven floor covering underlays (not of
                              man-made filaments), weighing >150 g/
                              square m, whether or not impreg, coated,
                              cov or laminated.
5603.94.90.................  Nonwovens nesoi (not of man-made
                              filaments), weighing >150 g/square m,
                              whether or not impregnated, coated,
                              covered but not laminated.
6903.20.00.................  Refractory ceramic goods (o/than of
                              siliceous fossil meals or earths), nesoi,
                              cont. by wt. o/50% alumina or mix. or
                              comp. of Al2O3 & SiO3.
7013.22.50.................  Stemware drinking glasses of lead crystal,
                              valued over $5 each.
7013.28.20.................  Stemware, o/than of pressed and toughened
                              glass, o/than lead crystal, valued o/$0.30
                              but n/over $3 each.
7013.28.50.................  Stemware, o/than of pressed and toughened
                              glass, o/than lead crystal, not cut or
                              engraved, valued o/$3 but n/over $5 each.
7013.28.60.................  Stemware, o/than of pressed and toughened
                              glass, o/than lead crystal, not cut or
                              engraved, valued over $5 each.
7013.37.20.................  Drinking glasses, nesoi, o/than of pressed
                              and toughened glass, o/than lead crystal,
                              valued o/$0.30 but n/over $3 each.
7013.37.60.................  Drinking glasses, nesoi, o/than of pressed
                              and toughened glass, o/than lead crystal,
                              not cut or engraved, valued over $5 each.
7013.41.50.................  Glassware for table or kitchen purposes (o/
                              than drinking glasses), of lead crystal,
                              valued over $5 each.
7013.49.60.................  Glassware for table or kitchen purposes (o/
                              than drinking glasses), nesoi, n/cut or
                              engraved, valued over $5 each.
7013.91.50.................  Glassware for toilet/office/indoor decor. &
                              similar purposes, of lead crystal, valued
                              over $5 each.
7019.90.10.................  Woven glass fiber articles (other than
                              fabrics), nesoi.
7019.90.50.................  Glass fibers (including glass wool), nesoi,
                              and articles thereof, nesoi.
7105.90.00.................  Natural or synthetic precious (except
                              diamond) or semiprecious stone dust and
                              powder.
7403.29.01.................  Copper alloys (o/than copper-zinc, copper-
                              tin alloys), unwrought nesoi.
8305.20.00.................  Base metal staples in strips (e.g., for
                              offices, upholstery, packaging).
8418.10.00.................  Combined refrigerator-freezers, fitted with
                              separate external doors, electric or
                              other.
8504.90.65.................  Printed circuit assemblies of the goods of
                              subheading 8504.40 or 8504.50 for
                              telecommunication apparatus.
8504.90.75.................  Printed circuit assemblies of electrical
                              transformers, static converters and
                              inductors, nesoi.
8515.80.00.................  Electric welding apparatus nesoi, and
                              electric machines and apparatus for hot
                              spraying metals or sintered metal
                              carbides.
8526.10.00.................  Radar apparatus.
9003.11.00.................  Frames and mountings, of plastics, for
                              spectacles, goggles or the like.
9005.10.00.................  Binoculars.
9005.80.40.................  Optical telescopes, including monoculars.
9005.80.60.................  Monoculars and astronomical instruments
                              other than binoculars and optical
                              telescopes but not including instruments
                              for radio-astronomy.
9010.60.00.................  Projection screens.
9012.10.00.................  Microscopes other than optical microscopes;
                              diffraction apparatus.
9015.40.80.................  Photogrammetrical surveying instruments and
                              appliances, other than electrical.
9015.80.20.................  Optical surveying, hydrographic,
                              oceanographic, hydrological,
                              meteorological or geophysical instruments
                              and appliances, nesoi.
9027.50.80.................  Nonelectrical instruments and apparatus
                              using optical radiations (ultraviolet,
                              visible, infrared), nesoi.
9030.40.00.................  Instruments and apparatus specially
                              designed for telecommunications.
9201.20.00.................  Grand pianos.
------------------------------------------------------------------------


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[FR Doc. 2021-06625 Filed 3-30-21; 8:45 am]
BILLING CODE 3290-F1-P