① The tax reform bill currently being considered by the US Congress includes a provision. If foreign countries levy digital services taxes on large US companies such as Amazon and Google's parent company Alphabet, US President Trump will have the right to retaliate; ② The European Union has long been known for being strict against US tech giants, and has issued many huge fines.
Financial Services Association, May 30 (Editor Xia Junxiong) The tax reform bill currently being considered by the US Congress contains a provision if foreign countries agree $Amazon (AMZN.US)$ , $Alphabet-A (GOOGL.US)$ Large US companies such as the parent company Alphabet levy a digital services tax, and US President Trump will have the right to retaliate.
The US House of Representatives passed Trump's tax reform bill last week and is currently being submitted to the Senate for review. The bill covers the core agenda of Trump's second term, including a number of tax cuts, cuts in social spending, and increased spending on border security. Trump described the bill as “big and beautiful.”
“If foreign countries want to tax US companies operating in the US, then their own businesses should also be taxed,” said Kansas Republican Congressman Ron Estes, one of the drafters of the provision.
Currently, about 17 countries in Europe and the rest of the world have technology products for the US (for example $Meta Platforms (META.US)$ (Instagram, a subsidiary of the subsidiary) levied or announced that it would levy a similar digital tax.
German Culture Minister Wolfram Weimer said on Thursday that the German government is considering imposing a 10% tax on large online platforms such as Google and Facebook.
The European Union has repeatedly issued huge fines against US tech giants
The EU has long been known for being tough on American tech giants, and has issued a number of huge fines.
In April of this year, EU regulators decided on the basis of the Digital Market Act (DMA) $Apple (AAPL.US)$ Meta and Meta were fined 0.5 billion euros and 200 million euros, respectively.
In fact, the EU's fines against Apple and Meta are already relentless. The DMA allows regulators to fine companies up to 10% of their global annual turnover, and this time the amount of the fine is far below this limit, only about 0.1% of each company's annual revenue.
In previous years, the European Union imposed a number of high fines on US tech giants, including imposing more than 8 billion US dollars on Alphabet and ordering Apple to pay 13 billion euros in additional taxes to Ireland.
Democrats are also not against retaliatory tax provisions
This type of taxation has simultaneously aroused dissatisfaction among both parties in the US Congress. Although the Democratic Party opposed the entire “big and beautiful” bill, it did not raise objections to the retaliatory tax provisions in it. This provision appeared in section 899 of the 1,100-page bill.
Trump has long called on other countries to lower barriers to American goods and services. According to the bill, Congress will authorize its government to raise tax rates for foreign individuals and businesses operating in the US.
According to estimates by the United States Congressional Joint Committee on Taxation, the provision could bring in about 116 billion dollars in fiscal revenue over the next ten years. However, some experts have warned that this retaliatory tax could have unintended consequences, such as curbing foreign investment in the US.
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