WASHINGTON – In new testimony, global tech trade association ITI reiterates its call for a multilateral, consensus-based solution to address the tax challenges of the digitalizing economy. Digital services taxes (DSTs) depart from longstanding international tax principles and impede a company’s ability to innovate, expand, and deliver essential goods and services to individuals and businesses worldwide.

ITI’s Megan Funkhouser, Director of Policy for Tax, will speak before the Office of the U.S. Trade Representative (USTR) during its hearing on the Section 301 investigations into DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom on Monday, May 3.

“Tax policy problems require tax policy solutions,” ITI writes in its testimony. “It is with this in mind that we again encourage governments to withdraw their unilateral measures and to continue their work to address the harmful fragmentation caused by the proliferation of digital services taxes and reach consensus on a sustainable, multilateral approach.”

Beyond the detrimental impacts identified in the Section 301 reports released in January 2021, ITI notes that the continuing proliferation of DSTs detracts from the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework’s efforts to realize a sustainable approach to the tax challenges arising from the digitalization of the global economy. 

ITI’s Principles for a Solution in the OECD’s Project for Addressing the Tax Challenges of the Digitalisation of the Economy and ongoing engagement with the OECD, including in December 2020, December 2019 (Pillar Two), and November 2019 (Pillar One), demonstrate that ITI is a leading industry voice on policies related to international taxation and the digitalization of the global economy. ITI also continues to engage with individual jurisdictions that have adopted or are considering adoption of unilateral tax measures, including the European Commission and India.

Read ITI’s full testimony here.

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