Czech Republic Expected To Reduce Digital Tax Under U.S. Pressure

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Posted by Andreas Hellmann on Thursday, February 27th, 2020, 2:32 PM PERMALINK

With a 7% Digital Services Tax (DST), the Czech Republic plans to impose the highest DST on American companies in the European Union. Under pressure from the Trump Administration, the Czech government is now expected to reduce the tax significantly or even postponing it to a later date.

Per Bloomberg reporting Czech Finance Minister Alena Schillerova said: "I asked the prime minister to schedule a debate at the coalition council about a potential change of the rate from the current 7% to 5%." She also mentioned that postponing the date when the tax comes into effect would also be an option. 

Czech Prime Minister Andrej Babis backed the French push for an EU-wide levy from the beginning, quickly proposed a Czech Digital Tax after the European proposal did not reach unanimous support and failed. 

This move from the Czech government shows that President Trump's strategy to put pressure on countries that impose discriminatory taxes on American companies works, especially after French President Macron has recently folded on his Digital Services Tax plans. 

Now it is of the utmost importance that the Trump administration further steps up its opposition as Digital Taxes in Austria, Italy, and Turkey are about to be implemented next month. 

Photo Credit: Chambre des Députés

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