WASHINGTON -- Today, global tech trade association ITI issued the following statement reacting to the release of Office of the U.S. Trade Representative’s (USTR) reports on its Section 301 investigations into digital services taxes adopted by India, Italy, and Turkey and its suspension of tariff action in France’s digital services tax investigation:

“The proliferation of unilateral digital services taxes undermines the progress of ongoing multilateral efforts to address the tax challenges arising from the digitalization of the global economy,” said Jason Oxman, ITI’s President and CEO. “Considering the continued commitment of the nearly 140 participating countries – as well as G20 Leaders – to engage toward a consensus, multilateral solution by mid-2021 through the OECD, we view the adoption and collection of targeted, unilateral measures as unnecessary and counterproductive actions. We appreciate USTR’s continuing efforts to investigate unilateral digital services taxes and welcome the results of its examinations of India, Italy, and Turkey’s measures. Critically, USTR recognized the discriminatory aspects of the digital services taxes adopted by these three countries and is authorized by law to respond with an appropriate and feasible trade response should the measures remain in place.

“These findings come as USTR has decided to delay indefinitely the imposition of tariffs on France in regard to the Section 301 investigation of its targeted, unilateral tax," continued Oxman. "In addition to continued multilateral engagement, the U.S. government should clearly specify a course of action to appropriately resolve the issues identified in the Section 301 reports so that harmful unilateral measures like France’s, which contravene longstanding international tax principles and threaten the ongoing multilateral negotiations, don’t advance. We strongly encourage all countries that have or are seeking to adopt unilateral digital services taxes – including India, Italy, and Turkey, as well as France, which recently resumed the collection of its unilateral tax – to withdraw their measures. We continue to respectfully urge all participating governments to focus on achieving a successful and lasting tax policy resolution at the OECD.”

Sections 301-310 of the Trade Act of 1974, commonly referred to as Section 301, provide USTR with legal authority to seek to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services. Once the U.S. government initiates a Section 301 investigation, USTR seeks a negotiated settlement with the country concerned. Absent agreement on an acceptable solution, and where a country’s obligations under a trade agreement are implicated, the law requires that USTR bring a formal dispute under that trade agreement. In other instances, Section 301 provides USTR with the authority to impose trade sanctions on economies that it deems to be implementing unfair trade practices.

This statement has been updated to reflect the USTR announcement regarding USTR's suspension of tariff action in France’s digital services tax investigation.