Recently, Senator Chuck Grassley spoke out against some European countries imposing a digital services tax targeting American tech companies such as Facebook, Google, and Amazon, and many others. In his prepared statement Grassley noted:
Let me be very clear right from the outset. These countries should immediately cease any unilateral actions that target U.S.-based multinationals and instead focus their energy and efforts on the multilateral solutions that are being developed by the global community at the OECD.
To be clear, these types of taxes are discriminatory. They target U.S.-based multinationals. They will likely result in double taxation. And they will create a new transatlantic trade barrier. These effects will come just as we head into negotiations for a new trade agreement with the EU. This is the exact opposite direction that our transatlantic trade relationship should be going.
And I encourage nations around the world to participate and allow this process to play out. The alternative is not acceptable: discriminatory, unilateral actions, double taxation and potentially negative trade implications. No good outcomes for countries that impose the taxes. No good outcomes for the countries whose companies are the subject of the tax—mainly, the United States.
In a letter to Senator Grassley, the President of Americans for Tax Reform Grover Norquist thanked Grassley for his effort and expressed support for Grassley’s position:
An EU-wide or even unilateral Digital Services Tax poses unprecedented dangers to tax competition and tech innovation. These taxes will hurt American economic growth. The new tax would represent a dramatic and irreversible shift for the international tax system, would mean damage to the transatlantic relationship and could lead to a spiral of retaliation.
Americans for Tax Reform will continue to highlight the negative effects of this issue to all American taxpayers.
Americans for Tax Reform, along with Senator Grassley, are encouraging European Union member states and any other country flirting with a digital services tax to stop their unilateral actions.
Read the full letter here.