Sunday, November 27

Spain agrees with the US not to punish it with new tariffs for the Google rate

Along with Austria, France, Italy and the United Kingdom


Spain will generate a tax credit if the North American digital giants pay more than what the OECD then calculates. Montero is pleased to have avoided an additional 25% of tariffs on textile, glassware and footwear products.

Mara Jess Montero, Minister of Finance.BERNARDO DAZ

Spain and four other European countries have reached an agreement with the US to adapt their digital taxes to the global pact forged in the OECD. Austria, France, Italy, the United Kingdom, in addition to Spain, will thus be able to maintain their respective taxes without fear of commercial punishment from the North American territory, where the vast majority of digital giants come from, such as Google, Facebook, Apple, Microsoft, Amazon o Netflix.

The pioneering Tax on Certain Digital Services (IDSD), which has already begun to be settled by the Tax Agency and known by the nickname of Google, thus, can be maintained without fear of reprisals until the entry into force of the so-called Pillar 1 of the solution reached by the OECD and the G-20, which should never take place beyond December 31, 2023.

Faced with this tax, the United States had announced the imposition of the 25% additional tariffs on Spanish products that affected the textile, footwear or interior glass sector, although a six-month moratorium was established that ended next November.

In the “transitional period” that runs from January 1, 2022 to the end of 2023, “the US agrees not to initiate any commercial measures against these European countries, the Department led by Mara Jess Montero has stated. President Joe Biden, led by Donald Trump, had been especially belligerent in this regard.

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Thanks to this understanding, it will not be evaluated until 2024 if the payment made by the affected multinationals has been higher than that which would have corresponded in case of applying the internationally agreed Pillar 1. “If the payment made is higher, a tax credit will be generated for said amount,” said the Treasury.

“It is a very positive agreement that provides legal security and certainty to our productive fabric by guaranteeing that there will be no trade barriers to the entry of Spanish products into the US market,” Montero stressed: “That risk of more tariffs for fundamental sectors of our economy such as the textile or footwear industry, among others, disappears thanks to the discreet but effective work of the Government and, also, highlights the good existing harmony with the Biden administration“In addition, the minister recalls that” with this agreement Spain fulfills its commitment to adapt the digital tax to the international consensus within the framework of the OECD and the G20 “-.

The collection by the controversial Google tax has been limited in the first half of its inaugural year in Spain to only 92 million euros, remotely far from the 968 million that the Treasury estimated to collect in 2021. The IDSD, known colloquially as the Google, taxes in the country companies that have global revenues that exceed 750 million euros per year, and within these companies those that have a turnover of more than 3 million in Spain.

The tax is directed to services online advertising, intermediation and sales of data and, although there have been conversations in the international arena to start it, some countries such as Spain have opted to advance with their own rate. The measure has run into the US Administration, but also with the digital companies themselves, who warn that a tax of this type, especially if it is unilateral, ends up having an impact on the prices they offer to their customers.

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