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Spain and the United States bury the hatchet for the ‘Google rate’: there will be no tariffs for the technology tax

USA will not impose tariffs on Spanish products in retaliation for the ‘Google rate’. The North Americans have announced, through the Treasury Department, that they have reached an agreement with the different European countries with which they have had the dispute since 2020 for their respective taxes on digital services that affected, above all, American companies. The pact includes, in addition to Spain, Austria, France, Italy and the United Kingdom.

The European countries and the United States have agreed after all of them agreed to join the global pact promoted by the Organization for Economic Cooperation and Development (OECD) to establish a global tax of 15% on profits to companies that have annual revenues of more than 750 million euros. These companies, which include major technology companies, they will have to contribute to the treasury of all those countries where they generate business, not only in those who have established their headquarters, as has happened until now.

Thus, European countries have agreed with the United States to eliminate their unilateral taxes on digital services once the OECD global agreement is enacted, something that is expected to happen by 2023. In practice, this means that one rate will be replaced by another within two years, so the big technology companies will not stop paying at any time. The Americans wanted the ‘Google tax’ to be eliminated immediately, but they have finally relented and have settled for it to be repealed when the global tax takes effect.

Therefore, Spain’s ‘Google rate’ will remain in force without entailing economic repercussions for exports from our country to the United States.

The conflict over the national taxes of countries such as Spain, France or the United Kingdom on digital services began with the Trump administration, which threatened European countries with retaliation if these rates affected US companies. In fact, in mid-July 2020 the United States Government, still in the hands of the media mogul, announced that it would impose a 25% tariff on some French products.

The arrival of Joe Biden to the White House in January 2021 reduced the tension between the United States and the Old Continent, despite the fact that his team said they were willing to impose tariffs if the Europeans did not back down. However, the new administration has been more in favor of dialogue than the previous one, and has finally opted for agreement over conflict.