David Rosenbloom Talks to POLITICO on UK Digital Services Tax and Its Implications for the U.S.

The fallout is getting heavier on this side of the Atlantic from the U.K.’s plan to impose a digital services tax on high-tech companies. House Ways and Means Committee Chairman Kevin Brady (R-Texas) [. . .] threaten[ed] unspecified retaliatory moves if the tax, or similar ones proposed by the EU and other countries, takes effect in 2020 as planned. “If the United Kingdom or other countries proceed, that will prompt a review of our U.S. tax and regulatory approach to determine what actions are appropriate to ensure a level playing field in global markets,” Brady said in a statement, per our Aaron Lorenzo. If Brady has anything particular in mind, neither he nor his staff provided any clues.

Experts say that may be because the options for striking back are limited. [. . .] David Rosenbloom, another former Treasury tax official who’s now at Caplin & Drysdale, said he doubts the proposed taxes would run afoul of tax treaties. “Even if such taxes created issues under tax treaties, (a) that is not a matter for Congress to do anything about; (b) it would take years to have the question played out in bilateral negotiations and domestic courts; and (c) it is humorous for the U.S. to complain about tax treaty issues, and especially for Brady to complain, given that the TCJA is rife with potential tax treaty ‘violations,’” Rosenbloom said.

For the full article, please visit POLITICO’s website.

Excerpt taken from the article “A Shot Across the Bow at Britain” by Toby Eckert for POLITICO.