U.S. trade official raises concerns about Canada’s proposed digital services tax

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WASHINGTON, Jan 12 (Reuters) – Deputy U.S. Trade Representative Jayme White expressed Washington’s ongoing concern about Canada’s proposed digital services tax in talks on Wednesday with Canada’s deputy trade minister, David Morrison, USTR said in a statement.

White spoke with Morrison ahead of the first meeting of trade deputies under the U.S.-Mexico-Canada (USMCA) trade agreement enacted in 2020.

White also stressed the importance of Canada’s fully meeting its USMCA commitments, including its allocation of dairy tariff-rate quotas and home-shopping, USTR said.

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Washington said in December it would consider “all options” under its trade agreements and domestic statutes if Canada proceeds with its proposed tax on corporations providing digital services, but gave no details. read more

The United States in October withdrew its threat of tariffs against five European countries over their digital services taxes as part of a deal to manage the transition to a new global tax regime for large highly profitable corporations such as Alphabet Inc’s Google (GOOGL.O) and Facebook Inc (FB.O).

Canada unveiled the proposed measure in April, saying it would stay in place until major nations come up with a coordinated approach on taxing the big digital companies.

The Organisation for Economic Cooperation and Development has since agreed on a common approach to ensure such companies pay their share of taxes, but a treaty to enforce this has yet to be implemented.

USTR said White and Morrison agreed to continue to collaborate on addressing the various issue, and maintain an open line of communication.

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Reporting by Andrea Shalal; Editing by Leslie Adler and Richard Chang

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