France adopts controversial tech tax, despite U.S. disapproval - The Washington Post

PARIS — The French Parliament formally adopted on Thursday a controversial tax on revenue from tech giants such as Facebook, Amazon and Google whose business models rely on digital advertising.

Amid escalating trade tensions, the Trump administration announced on Wednesday a formal investigation into whether the tax unfairly discriminates against U.S. businesses. The measure would levy a 3 percent tax on certain revenue that major tech companies earn in France.

Although European Union member states have been the world’s most aggressive regulators of tech companies, the multistate bloc could not agree on a continentwide digital tax policy. While E.U. countries have vowed to adopt similar taxes, France was the first — and will have to face the potential consequences.

Washington announced an investigation under Section 301 of the 1974 Trade Act, which grants the president the power to impose retaliatory measures against U.S. trading partners.

This was the same measure that permitted the Trump administration to slam China with tariffs last year, though it has rarely been used against so close an ally.

Despite U.S. pressure, French officials stood firm Thursday, brushing off the criticism.

“France is a sovereign state, it decides its fiscal provisions in a sovereign manner, and it will continue to decide its tax decisions in a sovereign manner,” said Bruno Le Maire, France’s finance minister, speaking to the French Senate on Thursday.

“I believe profoundly that between allies, we should and we can settle our differences by other means than threats,” he added.

[U.S. launches probe of French plans to tax tech giants]

The so-called “taxe GAFA”— Google, Amazon, Facebook and Apple — had already passed in France’s National Assembly and was approved on Thursday in the French Senate, the upper house.

But it will not officially become law until signed by President Emmanuel Macron, who has already expressed his support for the tax.

France had pushed for an E.U.-wide tax on tech giants, which has been a key priority for Macron since his election in May 2017. But several E.U. countries — including the Netherlands, Ireland, Luxembourg and Sweden — opposed such plans, as many of those countries are home to European headquarters of U.S. tech giants.

Le Maire admitted that an E.U.-wide tax was a dead-end in the spring 2019, as such a tax would require the backing of all 28 members of the bloc. Instead, Le Maire proposed that France go ahead alone with just a national tax.

The Organization for Economic Coordination and Development (OECD), whose 36 member countries include France and the United States, is working on revamping international tax rules to take better account of the digital economy.

Despite the new law, France is not the only country to plan a tax on tech giants. Britain and Austria are pursuing similar measures.

Read more

France aims 3% tax on Apple, Google and other tech giants

France fines Google nearly $57 million for first major violation of new European privacy regime

Today’s coverage from Post correspondents around the world

Like Washington Post World on Facebook and stay updated on foreign news

Let's block ads! (Why?)

Read Again https://www.washingtonpost.com/world/europe/france-adopts-controversial-tech-tax-despite-us-disapproval/2019/07/11/127b50d7-e287-427c-b220-9644cb276e70_story.html

Bagikan Berita Ini