![]() ![]() ![]() As part of the Unilateral Measures Compromise, the United States agrees to terminate proposed trade actions and commit not to impose further trade actions against Austria, France, Italy, Spain, and the United Kingdom with respect to their existing Digital Services Taxes until the end of the Interim Period. However, to the extent that taxes that accrue to Austria, France, Italy, Spain, and the United Kingdom with respect to existing Unilateral Measures during a defined period after political agreement is reached, and before Pillar 1 takes effect, exceed an amount equivalent to the tax due under Pillar 1 in the first full year of Pillar 1 implementation (prorated to achieve proportionality with the length of the Interim Period), such excess will be creditable against the portion of the corporate income tax liability associated with Amount A as computed under Pillar 1 in these countries, respectively. Under the Unilateral Measures Compromise, Austria, France, Italy, Spain, and the United Kingdom, countries which have all enacted Unilateral Measures before October 8, 2021, are not required to withdraw their Unilateral Measures until Pillar 1 takes effect. This joint statement describes a political compromise reached among the United States, Austria, France, Italy, Spain, and the United Kingdom, on a transitional approach to existing Unilateral Measures while implementing Pillar 1 (hereinafter, the “Unilateral Measures Compromise”).In general, Austria, France, Italy, Spain and the United Kingdom had preferred for withdrawal of Unilateral Measures to be contingent on implementation of Pillar 1, while the United States had preferred withdrawal of Unilateral Measures immediately as of October 8, 2021, the date political agreement with respect to Pillar 1 was reached. In line with this objective, Austria, France, Italy, Spain and the United Kingdom have agreed that as part of Pillar 1, they will withdraw all Unilateral Measures on all companies and refrain from imposing new Unilateral Measures.See Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy (October 8, 2021). From the outset, a key impetus of the OECD/G20 Inclusive Framework’s negotiations was to stop the proliferation of “Digital Services Taxes and other relevant similar measures” (collectively “Unilateral Measures”) by replacing them with a consensus-based reallocation of taxing rights among Inclusive Framework (“IF”) members.On October 8, 2021, the United States, Austria, France, Italy, Spain, and the United Kingdom, joined 130 other members of the OECD/G20 Inclusive Framework in reaching political agreement on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy. ![]()
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