Expressing strong opposition to the imposition of digital services taxes by other countries that discriminate against United States companies.

IV 118TH CONGRESS 1ST SESSION H. RES. 268 Expressing strong opposition to the imposition of digital services taxes by other countries that discriminate against United States companies. IN THE HOUSE OF REPRESENTATIVES MARCH 30, 2023 Mr. ESTES (for himself and Mr. KILDEE) submitted the following resolution; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned RESOLUTION Expressing strong opposition to the imposition of digital serv- ices taxes by other countries that discriminate against United States companies. Whereas a digital services tax (DST) is a tax levied by a gov- ernment on a company that provides a digital service to a person or company of that country; Whereas companies that provide digital services need not be physically located in the countries where the people that use the company’s services reside; Whereas under international income tax and trade agree- ments, a country’s taxing rights over multinational com- panies’ profits are based on a physical presence in such VerDate Sep 11 2014 00:13 Mar 31, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6300 E:\BILLS\HR268.IH HR268 kjohnson on DSK79L0C42PROD with BILLS 2 •HRES 268 IH country, rather than the mere sale or use of goods or services in such country; Whereas certain countries have developed DSTs that deviate from this international income tax system that are dis- criminatory to United States-based companies, and that threatens the success of United States companies and workers and their competitiveness in international mar- kets; Whereas many countries, including France, the United King- dom, Spain, Italy, Portugal, India, and others have al- ready implemented DSTs or similar taxes; Whereas, on July 10, 2019, the United States Trade Rep- resentative initiated a section 301 investigation for France regarding their application of DSTs on American companies; Whereas, on June 2, 2020, the United States Trade Rep- resentative (USTR) initiated section 301 investigations for Austria, India, Italy, Spain, Turkey, and the United Kingdom, regarding their application of DSTs on Amer- ican companies; Whereas these investigations resulted in the findings that these DSTs are ‘‘unreasonable or discriminatory and bur- dens or restricts U.S. commerce’’; Whereas, pursuant to that investigation, the USTR instituted additional duties on selected products from these coun- tries; Whereas the Organisation for Economic Co-operation and Development (OECD) has hosted multilateral negotia- tions with 142 countries to propose a framework for per- manently removing and replacing DSTs and other harm- VerDate Sep 11 2014 00:13 Mar 31, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6300 E:\BILLS\HR268.IH HR268 kjohnson on DSK79L0C42PROD with BILLS 3 •HRES 268 IH ful measures on a multilateral basis, and that the United States Treasury is participating in those negotiations; Whereas, on October 8, 2021, as a result of the OECD Pillar One negotiations, ‘‘all parties agreed to remove existing DSTs and other relevant similar measures, and to coordi- nate the withdrawal of these taxes, and on October 21, 2021, the United States, France, Italy, Spain, and the United Kingdom on a transitional approach to those countries’ DSTs prior to entry into force of Pillar 1’’; Whereas pursuant to this framework, the USTR closed its section 301 investigations and removed additional duties imposed on these countries; Whereas DSTs continue to be collected from United States companies in certain jurisdictions; Whereas unfortunately, other United States trading partners, such as Colombia and Canada, have instituted or threat- ened DSTs outside of the OECD framework, and poten- tially in violation of existing trade commitments; Whereas some countries’ efforts have moved beyond DSTs to ‘‘significant economic presence’’ policies intended to tar- get, among other things, income from digital transactions and of nonresident digital economy businesses; Whereas these policies, including DSTs, will discriminate against United States companies and lead to unfair dou- ble taxation outside the bounds of current international tax standards; and Whereas the United States Government currently has many options to oppose DSTs, including intensive bilateral en- gagement, withdrawal of trade preference programs, World Trade Organization dispute settlement, or impos- ing duties, fees, import restrictions, or taxes on the goods VerDate Sep 11 2014 00:13 Mar 31, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6300 E:\BILLS\HR268.IH HR268 kjohnson on DSK79L0C42PROD with BILLS 4 •HRES 268 IH or services of countries that unfairly target United States companies: Now, therefore, be it Resolved, That the House of Representatives— 1 (1) is committed to free and fair trade between 2 the United States and other countries; 3 (2) agrees with the findings of the reports 4 issued by the United States Trade Representative 5 that conclude that digital services taxes discriminate 6 against United States companies and are in violation 7 of existing international income tax and trade agree- 8 ments; 9 (3) supports the Office of the United States 10 Trade Representative resuming and expanding its 11 investigations into digital services taxes that were 12 suspended as a result of the October 2021 13 Organisation for Economic Co-operation and Devel- 14 opment framework agreement; 15 (4) calls on all other countries to cease and de- 16 sist from implementing any digital services tax, and 17 to immediately stop unfairly targeting United States 18 companies; 19 (5) calls on the relevant United States Govern- 20 ment agencies to use all available methods and re- 21 sources to protect United States companies from the 22 discriminatory effects of digital services taxes; and 23 VerDate Sep 11 2014 00:13 Mar 31, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\HR268.IH HR268 kjohnson on DSK79L0C42PROD with BILLS 5 •HRES 268 IH (6) supports Congress looking at additional 1 tools to address tax discrimination among United 2 States trading partners, including tax counter- 3 measures. 4 Æ VerDate Sep 11 2014 00:13 Mar 31, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\HR268.IH HR268 kjohnson on DSK79L0C42PROD with BILLS