As the world stares at a looming recession, “Big Tech” businesses are thriving globally. E-commerce, subscriptions, and distributed business infrastructure have emerged as major revenue drivers. This has led more countries (Brazil, Spain, Czech Republic) and the European Union (EU) to consider and charter a domestic path towards digital taxation, as a source to augment the languishing fiscal revenues. These are popularly known as Digital Service Taxes (DSTs).
As most Big Tech businesses are headquartered in the United States (US), as a measure of countering growing “protectionism”, the US has decided to investigate the DSTs adopted or under consideration by 9 countries, including India, and the EU. These investigations will be undertaken under the US Trade Code, which empowers the US Trade Representative (USTR) to respond to actions of other trading partners that are perceived to be unfair or discriminatory.