Published: Fri, July 12, 2019
Markets | By Erika Turner

France adopts digital tax on tech giants like Google, Facebook

France adopts digital tax on tech giants like Google, Facebook

US President Donald Trump has ordered an investigation into France's digital tax plans, which may result in retaliatory tariffs or trade restrictions, should the outcome of the probe identify unfair or discriminatory practices.

France has adopted a pioneering tax on internet giants like Google, Amazon and Facebook, despite United States threats of new tariffs on French imports.

The yardstick for French digital tax would be that companies will have worldwide revenues on digital services of at least 750 million euros ($845 million), and their sales in France ought to be 25 million euros ($28 million) or above.

"The United States is very concerned that the digital services tax. unfairly targets American companies", he said.

The U.S. investigation is similar to its inquiry into China before the administration imposed tariffs on $250 billion worth of Chinese exports. Lighthizer's agency will investigate the tax under Section 301 of the Trade Act of 1974.

The US President "has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce", he added.

British Green MEP Molly Scott Cato said the latest USA threat from Trump also served as a timely reminder for the United Kingdom, which is planning a similar tax on tech giants.

President Macron's tax is set to raise 400 million euros ($450m; £360m) just this year. It's for that reason that the USA government has ordered an inquiry into the new tax, with the potential to implement tariffs on French goods in retaliation. Le Maire added that the U.S. and France could find agreements rather than use threats to decide upon fair taxation levels.

YouTube app is now available on Amazon Fire TV platform
The new YouTube app will be the default YouTube experience for customers using a compatible Fire TV device, effective immediately. Meanwhile, Amazon has also enabled casting support in its Prime Video app on Android and iOS.

"Between allies, we can and should solve our disputes not by threats but through other ways", Finance Minister Bruno Le Maire told senators before the final vote.

The European Commission has estimated that multinational digital companies with investments in the EU are on average taxed at a rate 14 percentage points below that of other firms.

"France is a sovereign country, its decisions on tax matters are sovereign and will continue to be sovereign", Le Maire said.

The French government says the tax does not target USA companies and will affect European and Asian firms as well.

France officials rejected the USA complaint.

The tax has always been championed by French president Emmanuel Macron as a way to show that governments are capable of taking action to rein in large tech companies, which are seen as paying minimal tax in Europe due to their use of accounting loopholes.

The US administration took a strong stance past year against the EU's own digital tax plans, calling European proposals to tax tech giants discriminatory "against US companies".

Like this: