US Readies Response To French Tech Tax

US trade officials said they will announce any proposed action toward France on Monday over its decision to impose a digital tax on foreign (mostly US) tech firms at the start of 2019.

In March this year the United States hit out at this ‘digital tax’ imposed on companies by the French government. A senior US treasury official at the time called the move ‘ill conceived’, and highly discriminatory against American businesses.

President Trump has previously threatened US tariffs on items such as French wine, whilst the US was conducting its investigation into the matter.

Tech tax

And now the US will on Monday announce its findings, as well as proposed actions, on France’s 3 percent tax on digital service revenues offered by big name tech companies such as Amazon, Google and Facebook.

“The United States Trade Representative is in the process of completing its investigation … of France’s Digital Services Tax,” the USTR’s office was quoted by Reuters as saying in a statement on Wednesday, adding that it “will announce any proposed action in the investigation” on Monday.

Both sides had earlier agreed to set aside their differences as talks continued, and US officials weighed their options amid meetings with representatives from American technology and other companies.

It was not immediately clear what action the United States might take, or what the report’s findings would show.

Other countries

It should be noted that other countries are planning to follow this digital tax route, as tech companies have long been criticised for their tax practices that sees them reducing their tax bills by booking profits in low-tax countries (such as Ireland) regardless of the location of the end customer.

Canadian for example plans to impose its own digital services tax. But it is not alone.

The UK has also proposed its own national digital taxes, as are Spain, Italy and Germany.

The European Union is also seeking to reach an agreement to implement a European digital services tax.

For their part, tech companies have previously defended their tax structures, and insist they abide by tax laws as they’re currently written.

Global tech tax rules meanwhile are set to be agreed by 2020.

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