Global EditionASIA 中文雙語Fran?ais
Opinion
Home / Opinion / Op-Ed Contributors

Departure from past practices

By ZHANG LIN | China Daily | Updated: 2020-07-14 07:33
Share
Share - WeChat
JIN DING/CHINA DAILY

International tax principles need updating to accommodate the digitalization of the economy

The Office of the United States Trade Representative announced on June 2 that it had initiated an investigation under Section 301 of the Trade Act of 1974 into Digital Services Taxes (DSTs) that have been adopted or are under consideration by many of the country's closest trading partners-Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom.

This provision gives the USTR broad authority to investigate and respond to a foreign country's action which it considers may be unfair or discriminatory and negatively affect US companies.

DSTs could be the trigger for a trade war between the US and Europe or even world widespread.

The issues highlight the conflicts between countries over "digital sovereignty "and pose a huge challenge to the shaping of new tax rules for the digital economy.

For US multinational digital service companies faced with additional tax burdens, building a "neutral, stable, and transparent" international tax rule would be beneficial. However, the federal government seems to have a different view, and its unilateralist approach has weakened the authority and reduced the effectiveness of international organizations such as the Organization for Economic Cooperation and Development and the World Trade Organization.

The US is adopting a double standard on the issue. It is taking advantage of international laws as a measurement of the legitimacy of DSTs, but it is not willing to resolve the dispute via the WTO, neither is it relying on the OECD for further interpretation and coordination of the rules. Instead, it is adhering to the idea that its domestic law is superior to international law, and threatens to impose high tariffs for "violators".

But the US' withdrawal from negotiations cannot stop the spread of DSTs worldwide, and countries with continued tax base erosion have firmly actively adopted them and endorsed a global tax framework for digital services. Also, the introduction of DSTs in many countries highlights the urgency of establishing new international tax rules in the era of the digital economy.

As of June 2020, 14 EU member states have begun to implement, or expressed support for DSTs. Southeast Asian countries such as Singapore, Indonesia, Malaysia, and Thailand are considering levying value-added tax on foreign network service providers, a policy that has produced a huge demonstration effect among countries such as Australia, Canada, Japan, and New Zealand.

The US' withdrawal from negotiations makes it more difficult to achieve global settlement measures under the multilateral framework. As a consequence, more and more countries are likely to take unilateral DSTs as a short-term measure to protect domestic targeted small-and medium-sized enterprises, retain the potential value of domestic users, and change the status quo of tax base erosion.

Punitive measures of high tariffs are not helpful to coordinate the different proposals for international tax reform and overcome the theoretical and technical difficulties.

The Section 301 investigation requires that if DSTs are damaging to US companies, then the US president has the right to increase tariffs; stop trade reciprocity, bilateral trade agreements, bilateral investment agreements, or tax treaties; impose import limits; or take punitive measures like levying other expenses.

Last December, the US threatened to impose up to 100 percent import tariffs on $2.4 billion French exported commodities including wines, handbags, cosmetics and cheese. It is such a "mismatch" to take "traditional" tariff measures in response to "updated" international tax rules with much higher standards.

Instead of threatening to withdraw at this stage, the international community should make joint efforts to speed up multilateral negotiations to solve the theoretical and technical difficulties in the OECD, with a view to achieving a reasonable distribution of the international tax base.

The tough stance and punitive measures of the US will, to a certain extent, delay the implementation of the DSTs, but its political games will also increase the risk of trade conflicts.

On the one hand, the DSTs will create huge financial revenues for the levying countries. According to estimates by the UK Treasury, it is expected that the DSTs will increase the UK's fiscal revenue by 275 million euros ($311 million) in fiscal year 2020-21, and will generate 440 million euros in 2023-24. France is also expected to increase fiscal revenue by 560 million euros per year. Even if the US retaliates with high tariffs,

On the other hand, trade policies could be a political bargaining chip in the negotiations. The US' arbitrary behaviors could force European countries to take countermeasures, such as speeding up investigations of unfair competition in online platforms and digital advertisements, and establishing new antitrust rules in digital platforms. All those things could bring increasing risks to the global economy.

For China, it would be best to not simply support or deny DSTs, as any unilateral measures are not conducive to the coordination of new international tax rules. Due to the challenges posed by the digital economy worldwide, we should adhere to the principle of fairness, neutrality, transparency and stability in shaping international tax rules, as well as support the rise of a global multilateral tax governance system.

China should take an objective and forward-looking perspective on the digital economy. It should not only strengthen international cooperation with the OECD, but promote cooperation with United Nations Committee of Experts on International Cooperation in Tax Matters to ensure that developing countries can participate in international discussions on taxation policies for the digital economy.

The author is a fellow researcher of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Most Viewed in 24 Hours
Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
主站蜘蛛池模板: 亚洲字幕在线观看| 国产在线jyzzjyzz免费麻豆 | 大佬和我的365天2在线观看 | 美国式禁忌矿桥矿17集| 国产精品久久久久久久久电影网| 一个男的操一个女的| 日韩三级电影视频| 亚洲欧洲另类春色校园网站| 精品综合久久久久久888蜜芽| 国产日产精品系列推荐| 999久久久无码国产精品| 成人狠狠色综合| 久热中文字幕无码视频| 欧美精选欧美极品| 八戒八戒www观看在线| 里番全彩acg★无翼娜美| 国产精品视频a| www.色亚洲| 无码精品人妻一区二区三区影院 | flstingextreme头交| 手机永久无码国产av毛片| 久久综合图区亚洲综合图区| 欧美日韩中文字幕在线| 免费人成激情视频在线观看冫| 色婷婷久久综合中文网站| 国产成人精品一区二区三区免费 | 久久99精品久久久久久水蜜桃 | 日日躁夜夜躁狠狠躁超碰97| 亚洲va韩国va欧美va| 欧美色图亚洲天堂| 免费大香伊蕉在人线国产| 色偷偷成人网免费视频男人的天堂| 国产成人高清精品免费鸭子| 57pao一国产成视频永久免费| 天天澡天天碰天天狠伊人五月| 中文字幕亚洲综合久久| 日本漫画大全彩漫| 亚欧免费无码aⅴ在线观看| 欧美日本另类xxx乱大交| 亚洲视频一区网站| 精品久久人人做人人爽综合|