Five European countries agree to digital tax dispute... Resolving the trade conflict

The digital tax controversy, which has sparked a long-term dispute between the United States, the United Kingdom, and France, has been settled.

Bloomberg News reported on the 21st (local time) that the United States and five countries - Britain, France, Italy, Spain and Austria - announced an agreement to replace the current digital tax with a new tax that is under multilateral discussion and to continue constructive discussions. reported that

As a result, the tariff conflict over digital tax between the US and major European countries is expected to be resolved first.

With this agreement, European countries will stop discussing additional taxation instead of maintaining the existing tax until the Organization for Economic Cooperation and Development (OECD) level digital tax is introduced in 2023. If this occurs, we will proceed with the refund process.

The U.S. is lifting retaliatory tariffs that are currently suspended on these five countries.

Earlier, European countries, including France, were dissatisfied with the pace of discussions at the OECD level regarding digital tax, and have been pushing for a plan to impose a digital tax on multinational IT giants such as Facebook.

In the case of France, which has already established a digital tax, the tax revenue from this is 350 million euros (about 479.7 billion won) a year.

The United States regarded this as an unfair act against its own companies and even announced that it would impose retaliatory tariffs on consumer goods such as French wine and cheese during the Donald Trump administration.

The long-standing tariff war between the two sides has reached a turning point since the inauguration of President Joe Biden.

President Biden, who chose Europe for his first overseas tour in June, temporarily suspended retaliatory tariffs to end Trump's 'Atlantic trade war', and has continued to narrow differences over tariffs through a series of negotiations.

At the same time, the OECD-level discussion for the introduction of the digital tax has been promoted, and a framework has been prepared for the introduction of the system by 2023.

British Finance Minister Rishi Sunak said in a statement that the deal would protect the digital tax until 2023.

Austria's Finance Minister Gernot Brummel said, "This allows us to avoid retaliatory tariffs from the US and protect our tax system until global tax reform is completed."