US and European countries sign agreement on digital tax
The United States and five European countries have reached an agreement on a digital tax. The five countries, the United Kingdom, France, Italy, Spain and Austria, will adjust their existing taxes on technology company services under a joint agreement. In return, the United States eliminates a series of tariffs for services from those countries.
The deal ends a long-running conflict that could have undermined a multinational tax deal agreed upon by 136 countries. Once this agreement comes into force in the next two years, multinationals will have to pay a 15 percent tax in all the countries in which they operate.
Tech companies in particular have not yet done so. Many countries considered this unfair, and therefore imposed their own digital taxes on companies that provide services such as Spotify, Apple, Netflix, and Amazon. The United States saw this as an attack on its technology sector and responded by imposing punitive duties on products from countries that imposed such a tax.
These charges are now gone. European countries will return the tax they paid to companies if it is more than that under the new agreements.
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