At any point of the digital transition,…
A French official announced that France has revived the collection of a “digital service tax.” In addition, in the coming months, other nations, including Italy and the United Kingdom, will also start raising similar taxes. France decided earlier this year to abolish taxes on internet content for major media firms such as Facebook, Amazon and Google. In response, the timeline for imposing tariffs on French exports was also delayed by the United States.
A French official said, however, that France has reinstated levying a “digital service tax” on major technology firms. Moreover, in the coming months, other countries, including Italy and the United Kingdom, will also start raising similar taxes.
As a counter-attack, on January 6 next year, the United States will impose tariffs on US$1.3 billion worth of French imports, including cosmetics and handbags. Furthermore, the United States has conducted inquiries into digital service taxes implemented or deemed to be imposed by other countries such as India and Turkey, alleging that they discriminate against American technology firms.
In fact, there were rumors at the end of last month that, after the U.S. warning that it could place new tariffs on French goods in response, France started asking U.S. technology firms to pay digital service taxes.
At the time, sources revealed that businesses such as Facebook and Amazon had issued requests from the French authorities calling for the payment of digital services taxes for 2020. The official also explicitly listed American companies such as Google, Amazon, Facebook and Apple . An official from the French Ministry of Finance also confirmed: “The companies that need to pay this tax have been notified.”
In March last year, in order to promote fiscal justice, the French government launched a digital tax aimed at regulating major internet firms such as Google, Amazon and Facebook. This tax is imposed on worldwide sales from digital platforms worth no less than EUR 750 million (approximately EUR 847 million) and at least EUR 25 million (approximately EUR 28 million) from businesses in France. The rate of tax is 3% .
According to French Finance Minister Bruno Le Maire (Bruno Le Maire), some 30 Internet giants, most of whom are from the United States, would be subject to a 3% digital levy from France. Le Maire reports that roughly EUR 500 million (approximately US$ 565 million) in taxes will be raised per year.
The U.S. government is of the view that U.S. technology firms have been tax priorities arbitrarily. The United States had recently warned that it would place a tariff of 25 percent on French products, including handbags and cosmetics.