Notice2021-11856
Notice of Action in the Section 301 Investigation of Austria's Digital Services Tax
Primary source
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Published
June 7, 2021
Issuing agencies
Trade Representative, Office of United States
Abstract
On January 14, 2021, the U.S. Trade Representative announced a determination that Austria's Digital Services Tax (DST) is unreasonable or discriminatory and burdens or restricts U.S. commerce. This notice announces the U.S. Trade Representative's determination to take action in the form of additional duties of 25 percent on the products of Austria specified in Annex A to this notice. The U.S. Trade Representative has further determined to suspend application of the additional duties for a period of up to 180 days.
Full Text
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<title>Federal Register, Volume 86 Issue 107 (Monday, June 7, 2021)</title>
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[Federal Register Volume 86, Number 107 (Monday, June 7, 2021)]
[Notices]
[Pages 30361-30364]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-11856]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket Number USTR-2021-0002]
Notice of Action in the Section 301 Investigation of Austria's
Digital Services Tax
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Notice.
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SUMMARY: On January 14, 2021, the U.S. Trade Representative announced a
determination that Austria's Digital Services Tax (DST) is unreasonable
or discriminatory and burdens or restricts U.S. commerce. This notice
announces the U.S. Trade Representative's determination to take action
in the form of additional duties of 25 percent on the products of
Austria specified in Annex A to this notice. The U.S. Trade
Representative has further determined to suspend application of the
additional duties for a period of up to 180 days.
DATES:
June 2, 2021: The U.S. Trade Representative determined to take
action in the form of additional duties of 25 percent on products of
Austria specified in Annex A.
November 29, 2021: The end of the 180-day suspension period for the
additional duties.
FOR FURTHER INFORMATION CONTACT: For questions concerning the
investigation, please contact Benjamin Allen, Thomas Au, or Patrick
Childress, Assistant General Counsels at: (202) 395-9439, (202) 395-
0380, and (202) 385-9531, respectively; Robert Tanner, Director,
Services and Investment at (202) 395-6125; or Michael Rogers, Director
for Europe and the Middle East at (202) 395-2684. For specific
questions on customs classification or implementation of additional
duties on products, contact <a href="/cdn-cgi/l/email-protection#fa8e889b9e9f889f979f9e83ba99988ad49d958c"><span class="__cf_email__" data-cfemail="6a1e180b0e0f180f070f0e132a09081a440d051c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Proceedings in the Investigation
Austria has adopted a DST that imposes a 5 percent tax on gross
revenues from digital advertising services provided in Austria. The DST
applies only to companies with annual global revenues of [euro]750
million or more, and annual revenues from digital advertising services
in Austria of [euro]25 million or more. On June 2, 2020, the U.S. Trade
Representative initiated an investigation of Austria's DST pursuant to
section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade Act).
See 85 FR 34709 (June 5, 2020) (notice of initiation). The notice of
initiation solicited written comments on, inter alia, the following
aspects of Austria's DST: Discrimination against U.S. companies;
retroactivity; and possibly unreasonable tax policy. With respect to
[[Page 30362]]
tax policy, USTR solicited comments on, inter alia, whether the DST
diverged from principles reflected in the U.S. and international tax
systems including extraterritoriality; taxing revenue not income; and a
purpose of penalizing particular technology companies for their
commercial success. Interested persons filed over 380 written
submissions in response. The public submissions are available on
<a href="http://www.regulations.gov">www.regulations.gov</a> in docket number USTR-2020-0022.
Under section 303 of the Trade Act, the U.S. Trade Representative
requested consultations with the government of Austria regarding the
issues involved in the investigation. Consultations were held on
December 21, 2020. Based on information obtained during the
investigation, USTR prepared a comprehensive report on Austria's DST,
which is posted on the USTR website at <a href="https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes">https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes</a>. The report includes a full description of Austria's DST, and
supports findings that Austria's DST is unreasonable and discriminatory
and burdens or restricts U.S commerce. On January 14, 2021, based on
the information obtained during the investigation and the advice of the
Section 301 Committee, the U.S. Trade Representative determined that
Austria's DST is unreasonable or discriminatory and burdens or
restricts U.S. commerce, and therefore is actionable under sections
301(b) and 304(a) of the Trade Act. See 86 FR 6406 (January 21, 2021).
On March 31, 2021, USTR issued a notice proposing that appropriate
action would include additional ad valorem duties of up to 25 percent
on products of Austria to be drawn from a list of 40 tariff subheadings
of the Harmonized Tariff Schedule of the United States (HTSUS) included
in the annex to that notice. The March 31, 2021 notice requested
comments on the proposed action as well as on other potential actions
in the investigation. Witnesses provided testimony at public hearings
held on May 3 and May 6, 2021, and interested persons filed written
comments. Transcripts from the hearings are available on the USTR
website at: <a href="https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes">https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes</a>. The written public
submissions are available at: <a href="https://comments.ustr.gov/s/docket?docketNumber=USTR-2021-0002">https://comments.ustr.gov/s/docket?docketNumber=USTR-2021-0002</a> and <a href="https://comments.ustr.gov/s/docket?docketNumber=USTR-2021-0008">https://comments.ustr.gov/s/docket?docketNumber=USTR-2021-0008</a>.
II. Determination of Action To Be Taken in the Investigation
In accordance with section 301(b) of the Trade Act, the U.S. Trade
Representative has determined that action is appropriate in this
investigation. Section 301(b) provides that upon determining that the
acts, policies, and practices under investigation are actionable and
that action is appropriate, the U.S. Trade Representative shall take
all appropriate and feasible action authorized under section 301(c) of
the Trade Act, subject to the specific direction, if any, of the
President regarding such action, and all other appropriate and feasible
action within the power of the President that the President may direct
the U.S. Trade Representative to take under section 301(b), to obtain
the elimination of that act, policy, or practice. Section 304(a)(2)(B)
provides that the U.S. Trade Representative shall make the
determination of what action to take on or before the date that is 12
months after the date on which the investigation was initiated, or in
this case, by June 2, 2021.
Pursuant to sections 301(b) and (c) of the Trade Act, and in
accordance with the advice of the Section 301 Committee, the U.S. Trade
Representative has determined that appropriate action is the imposition
of ad valorem duties of 25 percent on products of Austria specified in
Annex A to this notice. Annex A contains a list of 23 tariff
subheadings, with an estimated trade value for calendar year 2019 of
approximately $65 million. In making this determination, the U.S. Trade
Representative considered the public comments submitted in the
investigation, as well as advice of advisory committees. In determining
the level of trade covered by the additional duties, the U.S. Trade
Representative considered the value of digital transactions covered by
Austria's DST and the amount of taxes assessed by Austria on U.S.
companies. Estimates indicate that the value of the DST payable by
U.S.-based company groups to Austria will be up to approximately $45
million per year. The level of trade covered by the action takes into
account estimates of the amount of tariffs to be collected on goods of
Austria and the estimates of the amount of taxes assessed by Austria.
Section 305(a) of the Trade Act provides, in pertinent part, that
the U.S. Trade Representative may delay implementation of the action to
be taken for up to 180 days ``if the Trade Representative determines .
. . that a delay is necessary or desirable . . . to obtain . . . [a]
satisfactory solution with respect to the acts, policies, or practices
that are the subject of the action.'' Pursuant to section 305(a), the
U.S. Trade Representative has determined to suspend the additional
duties for up to 180 days (that is, up to November 29, 2021) to allow
additional time for multilateral and bilateral discussions that could
lead to a satisfactory resolution of this matter.
In order to implement this determination, subchapter III of chapter
99 of the HTSUS is modified by Annex A of this 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 U.S. Trade Representative 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. For informational purposes, Annex B contains a list of the tariff
subheadings covered by the tariff action along with short product
descriptions. In all cases, the formal language in Annex A governs the
tariff treatment of products covered by the action. As specified in
Annex A, products provided for in new HTSUS heading 9903.90.02 will be
subject to an additional ad valorem duty of 25 percent. The additional
duties provided for in the new HTSUS heading established by Annex A
apply in addition to all other applicable duties, fees, exactions, and
charges. 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 U.S. Trade Representative will continue to monitor the effect
of the trade action, the progress of discussions in the Organisation
for Economic Co-operation and Development and G20, the progress of
discussions with Austria, and may adopt appropriate modifications. If a
modification to the action may be appropriate, the U.S. Trade
Representative will consider the
[[Page 30363]]
comments received in response to the March 31, 2021 notice.
Greta Peisch,
General Counsel, Office of the United States Trade Representative.
Annex A
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, subchapter III of chapter
99 of the Harmonized Tariff Schedule of the United States (HTSUS) is
modified:
1. By inserting the following new U.S. notes 23(a) and 23(b) to
subchapter III of chapter 99 in numerical sequence:
``23 (a) For the purposes of heading 9903.90.02, products of
Austria, as specified in this note, shall be subject to additional
duties as provided herein. All products of Austria that are classified
in the subheadings enumerated in this note are subject to the
additional duties imposed by heading 9903.90.02. The duties imposed by
heading 9903.90.02 shall be in addition to the general duty rates
provided for in the applicable provisions of the tariff schedule.
Products of Austria that are classified in the subheadings
enumerated in this note 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 heading 9903.90.02, 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 heading 9903.90.02 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 Austria
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 Austria that are provided for in heading 9903.90.02 and
classified in one of the subheadings enumerated in note 23(b) to this
subchapter 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.
(b) Heading 9903.90.02 shall apply to all products of Austria that
are classified in the subheadings enumerated below:
6903.20.00
7013.22.50
7013.28.20
7013.28.50
7013.28.60
7013.37.20
7013.37.60
7013.41.50
7013.49.60
7013.91.50
7019.90.10
7019.90.50
7403.29.01
8418.10.00
9003.11.00
9005.10.00
9005.80.40
9005.80.60
9010.60.00
9012.10.00
9015.40.80
9015.80.20
9027.50.80''.
2. by inserting the following new heading 9903.90.02 in numerical
sequence, with the material in the new heading inserted in the columns
of the HTSUS labeled ``Heading/Subheading'', ``Article Description'',
and ``Rates of Duty 1-General'', respectively:
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Rates of duty
-------------------------------------------------------
Heading/subheading Article description 1
--------------------------------------- 2
General Special
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``9903.90.02................... ``Articles the product The duty provided
of Austria, as in the applicable
provided for in U.S. subheading +
note 23(a) to this 25%''.
subchapter and as
provided for in the
subheadings enumerated
in U.S. note 23(b) to
this subchapter.
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Annex B
Note: The product descriptions that are contained in this Annex are
provided for informational purposes only, and are not intended to
delimit in any way the scope of the action. In all cases, the formal
language in Annex A governs the tariff treatment of products covered by
the action. Any questions regarding the scope of particular HTSUS
subheadings should be referred to U.S. Customs and Border Protection.
In the product descriptions, the abbreviation ``nesoi'' means ``not
elsewhere specified or included''.
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HTSUS subheading Product description
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6903.20.00....................... Refractory ceramic goods (o/than of
siliceous fossil meals or earths),
nesoi, cont. by wt. o/50% alumina or
mix. or comp. of Al2O3 & SiO2.
7013.22.50....................... Stemware drinking glasses of lead
crystal, valued over $5 each.
7013.28.20....................... Stemware, o/than of pressed and
toughened glass, o/than lead
crystal, valued o/$0.30 but n/over
$3 each.
7013.28.50....................... Stemware, o/than of pressed and
toughened glass, o/than lead
crystal, not cut or engraved, valued
o/$3 but n/over $5 each.
7013.28.60....................... Stemware, o/than of pressed and
toughened glass, o/than lead
crystal, not cut or engraved, valued
over $5 each.
7013.37.20....................... Drinking glasses, nesoi, o/than of
pressed and toughened glass, o/than
lead crystal, valued o/$0.30 but n/
over $3 each.
7013.37.60....................... Drinking glasses, nesoi, o/than of
pressed and toughened glass, o/than
lead crystal, not cut or engraved,
valued over $5 each.
7013.41.50....................... Glassware for table or kitchen
purposes (o/than drinking glasses),
of lead crystal, valued over $5
each.
7013.49.60....................... Glassware for table or kitchen
purposes (o/than drinking glasses),
nesoi, n/cut or engraved, valued
over $5 each.
7013.91.50....................... Glassware for toilet/office/indoor
decor. & similar purposes, of lead
crystal, valued over $5 each.
7019.90.10....................... Woven glass fiber articles (other
than fabrics), nesoi.
[[Page 30364]]
7019.90.50....................... Glass fibers (including glass wool),
nesoi, and articles thereof, nesoi.
7403.29.01....................... Copper alloys (o/than copper-zinc,
copper-tin alloys), unwrought nesoi.
8418.10.00....................... Combined refrigerator-freezers,
fitted with separate external doors,
electric or other.
9003.11.00....................... Frames and mountings, of plastics,
for spectacles, goggles or the like.
9005.10.00....................... Binoculars.
9005.80.40....................... Optical telescopes, including
monoculars.
9005.80.60....................... Monoculars and astronomical
instruments other than binoculars
and optical telescopes but not
including instruments for radio-
astronomy.
9010.60.00....................... Projection screens.
9012.10.00....................... Microscopes other than optical
microscopes; diffraction apparatus.
9015.40.80....................... Photogrammetrical surveying
instruments and appliances, other
than electrical.
9015.80.20....................... Optical surveying, hydrographic,
oceanographic, hydrological,
meteorological or geophysical
instruments and appliances, nesoi.
9027.50.80....................... Nonelectrical instruments and
apparatus using optical radiations
(ultraviolet, visible, infrared),
nesoi.
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[FR Doc. 2021-11856 Filed 6-4-21; 8:45 am]
BILLING CODE 3290-F1-P
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