France to tax big tech despite US trade threat: RPT

France will require large tech companies to pay taxes on digital services, which is likely to spark anger and retaliation from President Donald Trump and push the new US administration into a new trade war..

Last year, the country introduced a 3 percent tax on income from digital services. But the French government has suspended levies while the Organization for Economic Co-operation and Development (OECD) talks about a broader overhaul of the global tax system. These negotiations did not lead to a breakthrough.

«Companies received tax notice for this year», – said in a statement by the Treasury Department on Wednesday. Google (GOOGL), Facebook (FB) and Amazon (AMZN) are among the U.S. tech companies to pay a tax that applies to companies with global revenues of more than 750 million euros ($ 894 million).

These actions could provoke a new transatlantic clash shortly before leaving Donald Trump (Donald Trump).

His administration, which withdrew from negotiations at the OECD in June, has pledged to retaliate if France does not abandon the additional digital tax on U.S. tech corporations and may impose retaliatory duties on $ 1.3 billion in French goods, including bags and cosmetics. , already on January 6.

This could put the new US administration in a quandary as it seeks to cope with it as soon as possible. with Covid-19 and the economic impact of the pandemic. President-elect Joe Biden (Joe Biden) has pledged to rebuild relationships with key allies. But Democrats have previously opposed taxes on digital services, which they argued unfairly target American companies..

France obliges Big Tech to pay tax on digital services despite US threats

French finance minister Bruno Le Maire (Bruno Le Maire) said earlier this week that he hopes to convince Biden to renew his involvement in the OECD process so that an agreement can be reached. He added that the French government has consistently stated that taxes will return to effect in December in the absence of a deal..

«I really hope this new Biden administration will mark a fresh start in relations between Europe and the United States, and one opportunity to mark this new beginning is to reach consensus at the OECD level by early 2021.», – said Le Maire in the transmission Bloomberg TV.

The debate about how tech companies should be taxed has been going on for years.

Historically, companies have only had to pay taxes on income in the country where they register their profits. But European countries argue that they should also be able to collect so-called taxes on digital services, given that these companies are making more profit from sales in the region. Similar measures were taken by the UK, Italy and Austria.

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