VATupdate

Five European nations, US agree transitional approach to DSTs as regards Pillar One

On 21 October 2021, the governments of Austria, France, Italy, Spain, the United Kingdom, and the United States published a new joint statement announcing a compromise agreement on a transitional approach to phasing out the five European countries’ existing digital services tax (DST) regimes. This follows on from the agreement in early October between 136 countries of the G20/OECD Inclusive Framework on BEPS on the two-pillar solution to address the tax challenges arising from the digitalization of the economy. Pillar One of the solution would reallocate taxing rights in favor of market countries coordinated with the removal of all DSTs.

Source Deloitte

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