U.S., Turkey agree on terms to end digital services tax, trade retaliation-Treasury

Turkey and the US flags can be seen in this illustration dated August 25, 2018. REUTERS / Dado Ruvic / Illustration

WASHINGTON, Nov. 22 (Reuters) – The United States and Turkey have agreed on terms to withdraw Turkey’s digital services tax, which primarily targets highly profitable US tech giants and moves to a new global tax deal in 2023, the Treasury Department said on Monday with.

The deal will allow the US to end trade retaliatory measures against Turkey and adopt the same terms Washington agreed with Austria, the UK, France, Germany and Italy in October, the Treasury Department said.

As part of a comprehensive global tax treaty that was agreed on October 8th to introduce a global minimum corporate tax of 15% and to give market countries some taxation rights for large profitable companies, a total of 136 countries have basically agreed to deduct their taxes on digital services.

The United States has not withdrawn its tariff threats against India over its digital services tax, which is primarily targeted at US tech companies like Google (BrilleL.O), Facebook (FB.O), and Amazon.com (AMZN.O).

According to the agreed exit conditions, Turkey and European countries can continue to levy taxes on digital services until the introduction of the new regime, but all taxes levied after January 2022 in excess of the amount payable by companies under the new rules , are credited against the future tax liabilities of companies in these countries.

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Reporting by David Lawder; Editing by Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

https://www.reuters.com/business/us-turkey-agree-terms-end-digital-services-tax-trade-retaliation-treasury-2021-11-22/