Congress should amend and the administration should use Section 301 of the Trade Act of 1974 to target digital trade issues.

To Do: Update Section 301 of the Trade Act for the Digital Economy

Arguments used to justify digital services taxes on large Internet companies are flawed. The United States should counter these proposals and work to restore international consensus around tax treatment for multinational companies.

Digital Services Taxes: A Bad Idea Whose Time Should Never Come

The core argument that users create value is wrong. The distribution of taxable profits between countries normally reflects where value is created. The export of a product or service, whether digital or analog, usually does not create additional value and profits from imports into a country are normally not subject to corporate income tax.

Comments to the U.S. Trade Representative Regarding Section 301 Investigations of Digital Services Taxes

France’s digital services tax, which other nations also are considering, represents a radical departure from current practice and would greatly complicate ongoing efforts by the OECD to negotiate changes to the international tax regime by 2020.

Testimony to the U.S. Trade Representative on France’s Digital Services Tax

Testimony to the U.S. Trade Representative on France's Digital Services Tax

Digital Services Taxes Would Impede Growth and Innovation, New Report Shows

ITIF Applauds USTR Tariff Probe Over Unilateral Digital Tax Measures

The Commerce Department should apply ICT Service Reviews to EU firms that conduct transactions with U.S. adversaries.

To Do: Apply ICT Service Reviews to EU Firms

Just because DSTs may be attractive to individual countries doesn’t make them good policy. In fact, they are bad policy. A central goal of good tax policy should be to treat similar transactions the same way. DSTs violate this principle in a number of ways.

Two Reasons Digital Services Taxes Are Attractive—and Five Reasons They’re Still Wrong

Two Reasons Digital Services Taxes Are Attractive—and Five Reasons They're Still Wrong

France’s digital services tax disproportionately targets large U.S. tech companies through escalating financial burdens, with a proposed increase from 3 percent to 5 percent that would extract an additional €500 million annually from American firms.

To Do: Impose Mirror Taxes on Countries With Digital Service Taxes

Recommendation

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Editors’ Recommendations

Testimony to the US House Ways and Means Trade Subcommittee: Protecting American Innovation by Establishing and Enforcing Strong Digital Trade Rules

Related

To Do: Update Section 301 of the Trade Act for the Digital Economy

Digital Services Taxes: A Bad Idea Whose Time Should Never Come

Comments to the U.S. Trade Representative Regarding Section 301 Investigations of Digital Services Taxes