Type: Legislation
The US has prolonged its truce on trade measures against five countries—UK, Italy, France, Spain, and Italy—imposing Digital Services Taxes (DSTs) until June 30, 2024. However, OECD Pillar 1 talks, aimed at reaching a global consensus on taxing income from digital services sold across borders, face challenges, leading to sluggish progress and a one-year extension of negotiation deadlines. Despite ongoing negotiations, the US Congress’s resistance presents a barrier to ratifying any agreement that would grant other countries more taxing rights over American digital giants. Meanwhile, Canada has implemented its DST, with initial collections set for 2025 if no broad OECD agreement is reached. Additionally, efforts to implement Pillar 1, including the application of Amount B, aim to simplify transfer pricing and baseline calculations for foreign entities, recently issuing guidance to mitigate disputes and enhance compliance certainty.
Effective date: June 30, 2024
