The U.S. recently came to terms with two more countries regarding the transitional approach from existing digital services taxes (DSTs) to implementing Pillar One of the Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework’s two-pillar plan regarding the digitalization of the economy.
The two agreements were announced via the Treasury Department’s Turkey announcement, released Nov. 22, 2021, and the Treasury Department’s India announcement, released Nov. 24, 2021. Both releases state these agreements represent a “pragmatic solution” for global economies to work towards implementation of the OECD/G20 Inclusive Framework’s multilateral tax regime. In addition, the U.S. agreed to terminate trade measures implemented as a result of the Turkish and Indian Digital Service Taxes (DSTs).
Any liabilities generated by U.S.-based companies that accrue during an interim period—generally defined as “after political agreement is reached and before Pillar One takes effect”—will be creditable against future taxes accrued under Pillar One. These agreements follow similar DST withdrawal announcements from the Treasury Department in October 2021, from a joint statement with Austria, France, Italy, Spain and the United Kingdom.
David E. Sites
David leads the firm's International Tax practice, which focuses on global tax planning, cross border merger and acquisition structuring, and working with global organizations in a variety of other international tax areas.
Washington DC, Washington DC
- Technology and telecommunications
- Retail and consumer products
- International tax
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