As published on cityam.com, Thursday 14 May, 2020.
France will push ahead with its tax on internet giants this year, its finance minister said today.
In January France offered to suspend its tax on big digital companies’ income in until the end of the year while an international agreement on cross-border taxation was negotiated this year.
“Never has a digital tax been more legitimate and more necessary,” Finance Minister Bruno Le Maire told journalists, adding that big digital companies were doing better than most during the coronavirus crisis.
Nearly 140 countries are negotiating the first major rewriting of international tax rules in more than a generation, to take better account of the rise of big tech companies that often book profit in low-tax countries.
However, the fallout from the coronavirus outbreak has left finance ministries more focused on saving their economies than overhauling outdated tax rules, making a deadline of the end of the year to wrap up the talks look increasingly compromised.
“In any case, France will apply as it has always indicated a tax on digital giants in 2020 either in an international form if there is a deal or in a national form if there is no deal,” Le Maire said.
France’s national tax has been a source of contention with Washington, which considers that it unfairly targets US digital companies.
In December the US threatened to hit French exports to the US with steep tariffs in retaliation for the new tax.
The US has vowed to slap tariffs of up to 100 per cent on $2.4bn (£1.6bn) of French goods, in retaliation over findings that a new digital services tax in the country would harm US tech companies.
US trade representative Robert Lighthizer said its investigation found that the French proposal was “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected US companies”, such as Google , Facebook, Apple and Amazon.