2478 Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Notices 

II. Proceedings in the Investigation 

On June 2, 2020, the U.S. Trade 

Representative initiated an investigation 

of Italy’s DST pursuant to section 

302(b)(1)(A) of the Trade Act of 1974, as 

amended (Trade Act). 85 FR 34709 (June 

5, 2020) (notice of initiation). The notice 

of initiation solicited written comments 

on, inter alia, the following aspects of 

Italy’s DST: Discrimination against U.S. 

companies; retroactivity; and possibly 

unreasonable tax policy. With respect to 

tax policy, USTR solicited comments 

on, inter alia, whether the DST diverges 

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 to the 

notice of initiation. The public 

submissions are available on 

www.regulations.gov in docket number 

USTR–2020–0022. 

Under Section 303 of the Trade Act, 

the U.S. Trade Representative requested 

consultations with the Government of 

Italy regarding the issues involved in 

the investigation. Consultations were 

held on November 10, 2020. 

As noted, based on information 

obtained during the investigation, USTR 

has prepared and published the Italy 

DST Report, which includes a 

comprehensive discussion on whether 

the acts, policies, and practices under 

investigation are actionable under 

Section 301(b) of the Trade Act. The 

Italy DST Report supports findings that 

Italy’s DST is unreasonable or 

discriminatory and burdens or restricts 

U.S. commerce. 

III. Determination on the Act, Policy, or 

Practice Under Investigation 

Based on the information obtained 

during the investigation, and taking 

account of public comments and the 

advice of the Section 301 Committee 

and advisory committees, the U.S. Trade 

Representative has made the following 

determination under sections 301(b) and 

304(a) of the Trade Act (19 U.S.C. 

2411(b) and 2414(a)): The act, policy, or 

practice covered in the investigation, 

namely Italy’s DST, is unreasonable or 

discriminatory and burdens or restricts 

U.S. commerce, and thus is actionable 

under section 301(b) of the Trade Act. 

In particular: 

1. Italy’s DST, by its structure and 

operation, discriminates against U.S. 

digital companies, including due to the 

selection of covered services and the 

revenue thresholds. 

2. Italy’s DST is unreasonable because 

it is inconsistent with principles of 

international taxation, including due to 

application to revenue rather than 

income and extraterritoriality. 

3. Italy’s DST burdens or restricts U.S. 

commerce. 

IV. Further Proceedings 

Sections 301(b) and 304(a)(1)(B) of the 

Trade Act provide that if the U.S. Trade 

Representative determines that an act, 

policy, or practice of a foreign country 

is unreasonable or discriminatory and 

burdens or restricts United States 

commerce, the U.S. Trade 

Representative shall determine what 

action, if any, to take under Section 

301(b). These matters will be addressed 

in subsequent proceedings under 

Section 301. 

Joseph Barloon, 

General Counsel, Office of the United States 

Trade Representative. 

[FR Doc. 2021–00363 Filed 1–11–21; 8:45 am] 

BILLING CODE 3290–F0–P 

OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

Notice of Determination Pursuant to 

Section 301: India’s Digital Services 

Tax 

AGENCY: Office of the United States 

Trade Representative (USTR). 

ACTION: Notice. 

SUMMARY: The U.S. Trade 

Representative has determined that 

India’s Digital Services Tax (DST) is 

unreasonable or discriminatory and 

burdens or restricts U.S. commerce and 

thus is actionable under Section 301. 

FOR FURTHER INFORMATION CONTACT: For 

questions concerning the investigation, 

please contact Thomas Au or Patrick 

Childress, Assistant General Counsels at 

(202) 395–0380 and (202) 395–9531, 

respectively, Robert Tanner, Director, 

Services and Investment at (202) 395– 

6125, or Brendan Lynch, Deputy 

Assistant U.S. Trade Representative, 

South and Central Asian Affairs, 202– 

395–2851. 

SUPPLEMENTARY INFORMATION: 

I. India’s DST 

Based on information obtained during 

the investigation, USTR has prepared a 

comprehensive report on India’s DST 

(India DST Report). The India DST 

Report, which is posted on the USTR 

website at https://ustr.gov/issue-areas/ 

enforcement/section-301-investigations/ 

section-301-digital-services-taxes, 

includes a full description of India’s 

DST. To summarize, India adopted the 

operative form of its DST on March 27, 

2020. India’s DST imposes a two 

percent tax on revenue generated from 

a broad range of digital services offered 

in India, including digital platform 

services, digital content sales, digital 

sales of a company’s own goods, datarelated services, software-as-a-service, 

and several other categories of digital 

services. India’s DST only applies to 

‘‘non-resident’’ companies. The tax 

applies as of April 1, 2020. 

II. Proceedings in the Investigation 

On June 2, 2020, the U.S. Trade 

Representative initiated an investigation 

of India’s DST pursuant to section 

302(b)(1)(A) of the Trade Act of 1974, as 

amended (Trade Act). 85 FR 34709 (June 

5, 2020) (notice of initiation). The notice 

of initiation solicited written comments 

on, inter alia, the following aspects of 

India’s DST: Discrimination against U.S. 

companies and unreasonableness as tax 

policy. With respect to unreasonable tax 

policy, USTR solicited comments on, 

inter alia, whether the DST diverges 

from principles reflected in the U.S. and 

international tax systems, including 

extraterritorial application and taxing 

revenue rather than income. 

Interested persons filed over 380 

written submissions in response to the 

notice of initiation. The public 

submissions are available on 

www.regulations.gov in docket number 

USTR–2020–0022. 

Under Section 303 of the Trade Act, 

the U.S. Trade Representative requested 

consultations with the Government of 

India regarding the issues involved in 

the investigation. Consultations were 

held on November 5, 2020. 

As noted, based on information 

obtained during the investigation, USTR 

has prepared and published the India 

DST Report, which includes a 

comprehensive discussion on whether 

the acts, policies, and practices under 

investigation are actionable under 

Section 301(b) of the Trade Act. The 

India DST Report supports findings that 

India’s DST is unreasonable or 

discriminatory and burdens or restricts 

U.S. commerce. 

III. Determination on the Act, Policy, or 

Practice Under Investigation 

Based on the information obtained 

during the investigation, and taking 

account of public comments and the 

advice of the Section 301 Committee 

and advisory committees, the U.S. Trade 

Representative has made the following 

determination under sections 301(b) and 

304(a) of the Trade Act (19 U.S.C. 

2411(b) and 2414(a)): The act, policy, or 

practice covered in the investigation, 

namely India’s DST, is unreasonable or 

discriminatory and burdens or restricts 

U.S. commerce, and is thus actionable 


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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Notices 2479 

under section 301(b) of the Trade Act. 

In particular: 

1. India’s DST, by its structure and 

operation, discriminates against U.S. 

digital companies, including due to the 

selection of covered services and its 

applicability only to non-resident 

companies. 

2. India’s DST is unreasonable 

because it is inconsistent with 

principles of international taxation, 

including due to its application to 

revenue rather than income, 

extraterritorial application, and failure 

to provide tax certainty. 

3. India’s DST burdens or restricts 

U.S. commerce. 

IV. Further Proceedings 

Sections 301(b) and 304(a)(1)(B) of the 

Trade Act provides that if the U.S. 

Trade Representative determines that an 

act, policy, or practice of a foreign 

country is unreasonable or 

discriminatory and burdens or restricts 

United States commerce, the U.S. Trade 

Representative shall determine what 

action, if any, to take under Section 

301(b). These matters will be addressed 

in subsequent proceedings under 

Section 301. 

Joseph Barloon, 

General Counsel, Office of the United States 

Trade Representative. 

[FR Doc. 2021–00362 Filed 1–11–21; 8:45 am] 

BILLING CODE 3290–F0–P 

OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

[Docket Number USTR–2019–0009] 

Notice of Modification of Section 301 

Action: Investigation of France’s 

Digital Services Tax 

AGENCY: Office of the United States 

Trade Representative (USTR). 

ACTION: Notice. 

SUMMARY: The U.S. Trade 

Representative has determined to 

modify the action being taken in this 

investigation by suspending, until 

further notice, the additional duties on 

products of France scheduled to take 

effect on January 6, 2021. 

DATES: The additional duties on 

products of France are suspended 

indefinitely, as of the previously 

scheduled effective date of 12:01 a.m. 

eastern standard time on January 6, 

2021. 

FOR FURTHER INFORMATION CONTACT: For 

questions concerning the investigation, 

please contact Thomas Au or Patrick 

Childress, Assistant General Counsels at 

(202) 395–0380 and (202) 385–9531, 

respectively, Robert Tanner, Director, 

Services and Investment at (202) 395– 

6125, or Michael Rogers, Director for 

Europe at (202) 395–2684. For specific 

questions on customs classification or 

implementation of additional duties on 

products, contact traderemedy@cbp.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On July 10, 2019, the U.S. Trade 

Representative initiated the 

investigation of France’s digital services 

tax (DST) pursuant to section 

302(b)(1)(A) of the Trade Act of 1974, as 

amended (Trade Act). See 84 FR 34042 

(July 16, 2019) (July 16, 2019 notice). 

The July 16, 2019 notice invited public 

comment on France’s DST, including 

whether the tax would discriminate 

against U.S. companies, the retroactive 

application of the new tax, and whether 

France’s DST diverged from norms 

reflected in the U.S. and international 

tax system. Witnesses provided 

testimony at an August 19, 2019 public 

hearing and interested persons filed 

written submissions. 

Following a request by the U.S. Trade 

Representative, consultations were held 

with the Government of France on 

November 14, 2019. 

On December 2, 2019, USTR 

published a comprehensive report on 

France’s DST which is available at 

https://ustr.gov/issue-areas/ 

enforcement/section-301-investigations/ 

section-301-frances-digital-services-tax. 

On December 6, 2019, based on the 

information obtained during the 

investigation and the advice of the 

Section 301 Committee, and as reflected 

in the December 2, 2019 report on the 

findings in the investigation, the U.S. 

Trade Representative published a 

determination that France’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 (19 

U.S.C. 2411(b) and 2414(a)). See 84 FR 

66956 (December 6, 2019) (December 6, 

2019 notice). 

The December 6, 2019 notice 

proposed that appropriate action would 

include additional ad valorem duties of 

up to 100 percent on products of France 

to be drawn from a list of 63 tariff 

subheadings of the Harmonized Tariff 

Schedule of the United States (HTSUS) 

included in the annex to that notice. 

The December 6, 2019 notice requested 

comments on the proposed action, as 

well as on other potential actions, 

including the imposition of fees or 

restrictions on services of France. 

Witnesses provided testimony at a 

January 7–8, 2020 public hearing and 

interested persons filed written 

comments. Transcripts from the August 

2019 and January 2020 hearings are 

available on the USTR website at 

https://ustr.gov/issue-areas/ 

enforcement/section-301-investigations/ 

section-301-frances-digital-services-tax. 

The written public submissions are 

available on www.regulations.gov under 

docket number USTR–2019–0009. 

In a notice published on July 16, 

2020, the U.S. Trade Representative 

determined to impose ad valorem duties 

of 25 percent on specified products of 

France. See 85 FR 43292 (July 16, 2020 

notice). The U.S. Trade Representative 

also determined to suspend the 

additional duties for up to 180 days 

(that is, until January 6, 2021) to allow 

additional time for bilateral and 

multilateral discussions that could lead 

to a satisfactory resolution of this 

matter. 

II. Determination To Modify Action 

Section 307(a)(1) of the Trade Act 

authorizes the U.S. Trade 

Representative to modify or terminate 

any action, subject to the specific 

direction, if any, of the President with 

respect to such action, that is being 

taken under Section 301, if, inter alia, 

the action being taken is no longer 

appropriate. Pursuant to sections 

301(b)–(c) and 307(a) of the Trade Act 

(19 U.S.C. 2417(a)), the U.S. Trade 

Representative has determined that the 

imposition of duties on the current 

effective date of January 6, 2021 no 

longer is appropriate. 

Subsequent to the initiation of this 

investigation, the U.S. Trade 

Representative initiated Section 301 

investigations of DSTs adopted or under 

consideration by Austria, Brazil, the 

Czech Republic, the European Union, 

India, Indonesia, Italy, Spain, Turkey, 

and the United Kingdom. See 85 FR 

34709 (June 5, 2020). These 

investigations involve similar DST 

measures, either in effect or under 

consideration, in ten additional 

jurisdictions. Given that these DST 

investigations are ongoing and have not 

yet reached any determinations on 

what, if any, trade action should be 

taken, the U.S. Trade Representative has 

determined that it is appropriate to 

suspend the action in the France DST 

investigation indefinitely. 

In making this determination, the U.S. 

Trade Representative considered the 

public comments submitted in the 

investigation, as well as advice of 

advisory committees. 

To give effect to the U.S. Trade 

Representative’s determination, the 

additional duties set out in Annex A of 

the July 16, 2020 notice are suspended 

indefinitely, as of the scheduled 


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