'US retains tariff retaliation option if DST still in place'

Washington, June 17 US Treasury Secretary Janet Yellen said that Washington retains the option to impose retaliatory tariffs on countries that don't remove Digital Service Taxes (DST), which according to her, discriminate against American technology companies.

"We share your goal of making discriminatory digital service taxes a thing of the past. And we've made substantial progress here," Yellen told lawmakers at a hearing held by the Senate Finance Committee on Wednesday.

"We are pursuing absolutely every avenue toward a swift and comprehensive standstill and rollback of our DSTs. Our partners are well aware of the importance of this issue," she said, adding the "discriminatory" nature of these taxes is "unacceptable" to the US.

"

Yellen also noted that the country is retaining all options for discouraging the use of DSTs, as the US Trade Representative (USTR) has started trade retaliation procedures via investigation in sanctions under the so-called Section 301.

"We're keeping that tool available to use if it were to become necessary to get prompt action to eliminate DSTs. While we very much hope to avoid trade conflicts, this tool remains a useful lever to bring countries to the bargaining table," she said.

Yellen's remarks came after the USTR's Office announced earlier this month that it will suspend retaliatory tariffs on certain goods from Austria, the UK, India, Italy, Spain and Turkey for six months to provide additional time to complete the ongoing multilateral negotiations on international taxation, following the one-year Section 301 investigations of DSTs adopted by the six countries.

"We're committed to resolving this issue, both on its merit and because it risks standing in the way of a once in a generation opportunity to create a new international tax system to end this serious and very long-standing problems of profit shifting and corporate tax competition," Yellen said.