[Federal Register Volume 86, Number 12 (Thursday, January 21, 2021)]
[Notices]
[Page 6406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01173]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Determination Pursuant to Section 301: Austria's 
Digital Services Tax

AGENCY: Office of the United States Trade Representative (USTR).

ACTION: Notice.

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SUMMARY: The U.S. Trade Representative has determined that Austria's 
Digital Services Tax (DST) is unreasonable or discriminatory and 
burdens or restricts U.S. commerce and thus is actionable under Section 
301.

FOR FURTHER INFORMATION CONTACT: For questions concerning the 
investigation, please contact Thomas Au or Patrick Childress, Assistant 
General Counsels at (202) 395-0380 and (202) 395-9531, respectively, 
Robert Tanner, Director, Services and Investment at (202) 395-6125, or 
Michael Rogers, Director, Europe and the Middle East at (202) 395-2684.

SUPPLEMENTARY INFORMATION:

I. Austria's DST

    Based on information obtained during the investigation, USTR has 
prepared a comprehensive report on Austria's DST (Austria DST Report). 
The Austria DST Report, which is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes, includes a full description of Austria's 
DST. To summarize, Austria's DST imposes a 5% tax on gross revenues 
from digital advertising services provided in Austria. The DST applies 
only to companies with annual global revenues of [euro]750 million or 
more, and annual revenues from digital advertising services in Austria 
of [euro]25 million or more.

II. Proceedings in the Investigation

    On June 2, 2020, the U.S. Trade Representative initiated an 
investigation of Austria's DST pursuant to section 302(b)(1)(A) of the 
Trade Act of 1974, as amended (Trade Act). See 85 FR 34709 (June 5, 
2020) (notice of initiation). The notice of initiation solicited 
written comments on, inter alia, the following aspects of Austria's 
DST: Discrimination against U.S. companies, retroactivity, and possibly 
unreasonable tax policy. With respect to tax policy, USTR solicited 
comments on, inter alia, whether the DST diverged from principles 
reflected in the U.S. and international tax systems including 
extraterritoriality, taxing revenue not income, and a purpose of 
penalizing particular technology companies for their commercial 
success.
    Interested persons filed over 380 written submissions in response 
to the notice of initiation. The public submissions are available on 
www.regulations.gov in docket number USTR-2020-0022.
    Under Section 303 of the Trade Act, the U.S. Trade Representative 
requested consultations with the Government of Austria regarding the 
issues involved in the investigation. Consultations were held on 
December 21, 2020.
    As noted, based on information obtained during the investigation, 
USTR has prepared and published the Austria DST Report, which includes 
a comprehensive discussion on whether the acts, policies, and practices 
under investigation are actionable under Section 301(b) of the Trade 
Act. The Austria DST Report supports findings that Austria's DST is 
unreasonable or discriminatory and burdens or restricts U.S. commerce.

III. Determination on the Act, Policy, or Practice Under Investigation

    Based on the information obtained during the investigation, and 
taking account of public comments and the advice of the Section 301 
Committee and advisory committees, the U.S. Trade Representative has 
made the following determination under sections 301(b) and 304(a) of 
the Trade Act (19 U.S.C. 2411(b) and 2414(a)): the act, policy, or 
practice covered in the investigation, namely Austria's DST, is 
unreasonable or discriminatory and burdens or restricts U.S. commerce, 
and thus is actionable under section 301(b) of the Trade Act. In 
particular:
    1. Austria's DST, by its structure and operation, discriminates 
against U.S. digital companies.
    2. Austria's DST is unreasonable because it is inconsistent with 
principles of international taxation.
    3. Austria's DST burdens or restricts U.S. commerce.

IV. Further Proceedings

    Sections 301(b) and 304(a)(1)(B) of the Trade Act provide that if 
the U.S. Trade Representative determines that an act, policy, or 
practice of a foreign country is unreasonable or discriminatory and 
burdens or restricts United States commerce, the U.S. Trade 
Representative shall determine what action, if any, to take under 
Section 301(b). These matters will be addressed in subsequent 
proceedings under Section 301.

Joseph Barloon,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2021-01173 Filed 1-19-21; 8:45 am]
BILLING CODE 3290-F0-P