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The US and Turkey announced Monday an agreement on the transition from existing Digital Services Tax to a new multilateral solution agreed by the OECD-G20 inclusive framework.
The move comes amid the historic agreement that was reached last month between 137 countries of the OECD-G20 inclusive framework, which represents nearly 95% of the world's GDP, on a two-pillar package of reforms to the international tax framework to be implemented in 2023.
"These reforms will provide for a tax framework that is fairer, more stable, and better equipped to meet the needs of a 21st century global economy," the US Treasury Department said in a statement.
"This compromise represents a pragmatic solution that helps ensure that countries can focus their collective efforts on the successful implementation of the OECD/G20 Inclusive Framework's historic agreement on a new multilateral tax regime and allows for the termination of trade measures adopted in response to the Turkish Digital Services Tax," it added.
According to the agreement, Turkey will not tax companies such as Google and Facebook above a certain rate.
The US and Turkey on October 8 joined 134 other members of the OECD-G20 inclusive framework, which includes Austria, France, Italy, Spain, and the UK, in reaching a political agreement on the statement on a two-pillar solution to address the tax challenges arising from the digitalization of the economy. (HA/VK)
