On June 2, 2021, United States Trade Representative (USTR) Katherine Tai announced the conclusion of the one-year Section 301 investigations of Digital Service Taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom. The final determination in those investigations is to impose additional tariffs of 25% on certain goods (specified in Annex A to each notice) from these countries, while suspending the tariffs for up to 180 days to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and in the G20 process. In each notice, Annex A is effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on November 29, 2021, which is 180 days after the determination of action. In the event the USTR determines that the suspension of the additional duties should be for less than a period of 180 days, USTR will issue a subsequent notice amending the effective date.
Advance copies of each of the Federal Register notices announcing and suspending the trade actions in the six investigations may be found at the websites listed below:
- Notice of Action in the Section 301 Investigation of Austria’s Digital Services Tax [Docket No. USTR–2021–0002] Annex A contains a list of 23 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $65 million and inserts new U.S. notes 23(a) and 23(b) to subchapter III of chapter 99 in numerical sequence and a new heading 9903.90.02.
- Notice of Action in the Section 301 Investigation of India’s Digital Services Tax [Docket No. USTR–2021–0003] Annex A contains a list of 26 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $119 million and inserts U.S. notes 24(a) and 24(b) to subchapter III of chapter 99 in numerical sequence and a new heading 9903.90.03.
- Notice of Action in the Section 301 Investigation of Italy’s Digital Services Tax [Docket No. USTR–2021–0004] Annex A contains a list of 44 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $386 million and inserts new U.S. notes 25(a) and 25(b) to subchapter III of chapter 99 in numerical sequence and a new heading 9903.90.04.
- Notice of Action in the Section 301 Investigation of Spain’s Digital Services Tax [Docket No. USTR–2021–0005] Annex A contains a list of 27 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $324 million. Annex A inserts new U.S. notes s 26(a) and 26(b) to subchapter III of chapter 99 in numerical sequence and new heading 9903.90.05.
- Notice of Action in the Section 301 Investigation of Turkey’s Digital Services Tax [Docket No. USTR–2021–0006] Annex A contains a list of 32 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $310 million. Annex A inserts new U.S. notes 27(a) and 27(b) to subchapter III of chapter 99 in numerical sequence and new heading 9903.90.06.
- Notice of Action in the Section 301 Investigation of the United Kingdom’s Digital Services Tax [Docket No. USTR–2021–0007] Annex A contains a list of 67 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $887 million. Annex A inserts new U.S. notes 28(a) and 28(b) to subchapter III of chapter 99 in numerical sequence and a new heading 9903.90.07.
In addition, each notice or Annex provides that:
Any product listed in Annex A, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and is admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern standard time on November 29, 2021, only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
The additional duties imposed by new headings [9902.90.02 through 9902.90.07] do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under subheadings 9802.00.40, 9802.00.50 and 9802.00.60 and heading 9802.00.80. For subheadings 9802.00.40, 9802.00.50 and 9802.00.60, the additional duties apply to the value of repairs, alterations or processing performed in the named country and as described in the applicable subheading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80.
Products of the named country that are classified in the subheadings enumerated in the notes 23(a) through 28(a) and that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99 shall be subject to the additional duties imposed by the action, and any such duty exemption or reduction shall apply only to the permanent general rate prescribed in provisions of chapters 1 through 97 of the tariff schedule.
The additional duties imposed by the new headings do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under subheadings 9802.00.40, 9802.00.50 and 9802.00.60 and heading 9802.00.80. For subheadings 9802.00.40, 9802.00.50 and 9802.00.60, the additional duties apply to the value of repairs, alterations or processing performed in the named country and as described in the applicable subheading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80
Products of the named countries that are provided for in the new headings [9903.90.02 through 9903.90.07] and classified in one of the subheadings enumerated in notes 23(b) through 28(b) shall continue to be subject to antidumping, countervailing or other duties (including duties imposed by other provisions of subchapter III of this chapter and safeguard duties set forth in provisions of subchapter IV of this chapter), fees, exactions and charges that apply to such products, as well as to the additional duties imposed herein.
Annex B contains product descriptions that are provided for informational purposes only, and are not intended to delimit in any way the scope of the action.
