Why Sri Lanka’s Digital VAT Won’t Trigger US Tariffs: Understanding Digital Taxation Differences

The USA is considering additional tariffs due to confusion between Digital VAT and Digital Services Tax (DST).
Digital VAT is a consumption tax on end-users of digital services, aligning with OECD guidelines.
Sri Lanka’s 18% VAT on nonresident digital service providers is similar to systems in other countries.
Countries like India and Vietnam have benefited from reduced US tariffs due to their VAT systems.
DST is a revenue-based tax targeting large tech firms, seen as discriminatory by the US.
The OECD proposed solutions to address DST issues, but VAT systems are supported for digital services.
DSTs were introduced due to delays in global tax framework implementation.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.