Leaders of the Senate Finance Committee wrote to Treasury Secretary Steven Mnuchin to express concerns over foreign countries establishing digital services taxes on U.S.-based multinational companies.
The senators added that the U.S. should engage with the Organization for Economic Co-operation and Development (OECD) to address these tax challenges.
“We write to express our serious concern regarding unilateral action by foreign countries to establish digital services taxes designed to discriminate against U.S.-based multinational companies,” Senate Finance Committee Chair Sen. Grassley (R-IA) and Ranking Member Sen. Ron Wyden (D-OR) wrote in a letter to Mnuchin. “It is important that you make clear to the representatives of these countries the need to abandon unilateral actions and work through the multilateral process at the Organisation for Economic Co-operation and Development (OECD),”
The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. Its mission is to promote policies that will improve the economic and social well-being of people around the world.
Last October, former SFC Chairman Orrin Hatch (R-UT) and Wyden urged European Union leaders to abandon unilateral action on a digital services tax that would inhibit transatlantic trade and lead to double taxation against U.S.-based multinational companies.
“Unfortunately, some countries are moving forward unilaterally with digital services taxes that follow similar frameworks as the previous European Commission proposal. It is important for these countries to understand the potential for long-term harm arising under these proposals and the need for each to refocus efforts on reaching multilateral consensus. The release of the OECD’s Policy Note today shows the process is moving forward, and unilateral action will only serve to undercut that progress,” the senators wrote.
They added that they are supportive of the Treasury Department’s participation in ongoing negotiations at the OECD regarding these new tax challenges.
“We urge you and your OECD counterparts to work expeditiously to achieve agreement on a measured and comprehensive approach to how international tax rules might be crafted to address such challenges,” the senators wrote.