US embassy Prague

Matt Atlas

U.S. Embassy Warns Of Counter-Measures Against Digital Tax

The U.S. will take “appropriate counter-measures’ if the Czech Republic moves forward with a proposed digital tax, the U.S. embassy in Prague said on Friday.

The U.S. government has clearly communicated its position regarding digital taxes, embassy spokesperson Ed Findlay said. He referred to a December commentary written by Ambassador Stephen King in Lidove noviny. The diplomat wrote that a digital tax in the Czech Republic will be met with appropriate counter-measures by the U.S. government. The embassy spokesperson also pointed out Finance Minister Steven Mnuchin’s statement from the Davos Economic Forum. Mnuchin told the media that countries that impose a digital tax will face President Donald Trump’s retaliatory tariffs.

The Chamber of Deputies supported the government’s proposal to introduce the tax on Wednesday. Tech companies with a global turnover of over 750 million euros (19 billion CZK), and annual turnover over CZK 100 million in the Czech Republic.

Foreign Minister Tomas Petricek (CSSD) told Czech Television on Thursday that the United States officially protested the proposal. He recently discussed the matter with King. “I understand that the United States perceives this negatively. On the other hand, we are trying to explain that this step is only temporary until an international solution is found,” Petricek said.

If approved by Parliament, the digital tax could start this year.