Electronic tax

U.S. trade official worried about Canada’s proposed digital services tax

WASHINGTON, Jan. 12 (Reuters) – U.S. Deputy Trade Representative Jayme White expressed Washington’s continued concern over Canada’s proposed digital services tax during talks on Wednesday with Canada’s Deputy Minister of Commerce. Commerce, David Morrison, said the USTR in a statement.

White spoke with Morrison ahead of the first meeting of trade deputies under the United States-Mexico-Canada (USMCA) trade agreement promulgated in 2020.

White also stressed the importance for Canada to fully meet its commitments to the USMCA, including its allocation of tariff rate quotas for dairy products and home shopping, the USTR said.

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Washington said in December it would consider “all options” under its trade agreements and national laws if Canada implements its proposed tax on companies providing digital services, but gave no details. . Read more

The United States in October withdrew its threat of tariffs against five European countries over their taxes on digital services as part of a deal to manage the transition to a new global tax regime for large, highly profitable companies like Google Alphabet Inc (GOOGL.O) and Facebook Inc (FB.O).

But he remains at odds with Canada on the issue.

Canada unveiled the proposed measure in April, saying it would stay in place until major countries come up with a coordinated approach to taxing large digital companies.

The Organization for Economic Co-operation and Development has since agreed on a common approach to ensure that these companies pay their share of taxes, but a treaty to enforce it has not yet been implemented.

The USTR said White and Morrison had agreed to stay in touch on the various issues, including bilateral steel trade, but there were no signs of progress on the digital tax dispute.

Senate Finance Committee leaders on Wednesday urged chief trade negotiator Katherine Tai to pressure Mexico and Canada to meet their commitments under a new trade pact in areas ranging from from potatoes to telecommunications.

Democratic Committee Chairman Ron Wyden and leading Republican on the panel Mike Crapo said it was best to resolve disputes through negotiation, but the USTR “must be prepared to use the powerful enforcement tools. and innovative “included in the UMSCA trade agreement.

On the issue of digital trade, senators said Canada’s efforts to pass a tax that discriminates against US businesses could “set a troubling precedent that could undermine years of work by OECD negotiators.”

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Reporting by Andrea Shalal; Editing by Leslie Adler, Richard Chang and David Gregorio

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