US tech giants resist French digital tax

Global Business

FILE – In this Jan.31, 2019 file photo, a trunk full of fake bank notes is displayed as activists from anti-globalization organisation Attac stage a protest at Google’s Paris headquarters to criticize the company’s tax evasion policies, in Paris. The French government is unveiling plans to slap a 3 percent tax on the French revenues of internet giants like Google, Amazon and Facebook. (AP Photo/Francois Mori, File)

Representatives from Amazon, Google and Facebook plus several industry associations testified before the U.S. Trade Representative Monday about France’s new digital tax.

CGTN’s Jim Spellman reports.

Amazon said the three percent tax is “harmful and “discriminatory.” The online retail giant responded by increasing the fees third party sellers based in France pay by a corresponding three percent.

Last month, France passed a new three percent Digital Services Tax. U.S. officials said this may unfairly target American online tech giants like Amazon, Google and Facebook.

The U.S.T.R. launched a Section 301 investigation into the new French tax in July.

The agency will evaluate the comments from U.S. businesses and make a decision about what they may do in response.

“The 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,” said U.S. Trade Representative Robert Lighthizer at the launch of the investigation.

When French President Emmanuel Macron signed the law last month, President Trump threatened to tax French wine in retaliation.

“They should not have done it. So I may do that, I may do that, I’ve always liked American wines better than French wines — even though I don’t drink wine. I just like the way they look. Ok. But the American wines are great, American wines are great, and they didn’t do the right thing when they start taxing our companies,” U.S. President Donald Trump in July said.

But French officials said this has nothing to do with targeting American companies. They said the digital tax is aimed at creating a level playing field for local French businesses.

“Our American friends should not understand the decision taken by France to have its own national taxation of digital activities as any willingness of targeting the American companies, that’s not the case. We are not willing to target the American companies. We are just willing to have a fair and efficient taxation of digital activities,” Bruno Le Maire French Finance Minister said.

Later this month at the G7, France will push for a universal tax on digital activities. It’s not clear if the U.S. will go along with such a plan.