France has taxed American tech giants. This could be the start of a new trade war

France has taxed American tech giants. This could be the start of a new trade war


It became known that the French authorities require large technology companies to pay a digital tax of 3% of the revenue received in the country. According to reports, Google, Facebook and Amazon have already received relevant notifications.

As a reminder, last year France introduced a tax on income from digital services at a rate of 3%. It is worth noting that in accordance with the law, only companies with a global annual turnover of more than € 750 million ($ 894 million) must pay digital tax. At the same time, at least € 25 million must be received by the company through the provision of digital services in France. The Ministry of Finance has confirmed that it has started sending out the relevant tax notices.

Thus, the tax will affect the largest technology companies from the United States, which may entail retaliatory measures from the American government. The source says the digital tax could be a step towards a transatlantic confrontation even before the departure of US President Donald Trump from office. In June of this year, representatives of the American side withdrew from negotiations at the Organization for Economic Cooperation and Development, promising to retaliate if France approves a digital tax. One of such measures may be the introduction of duties on French goods totaling $ 1.3 billion. However, it is possible that after Joe Biden comes to power in the United States, the situation will change in the other direction.

The debate about how tech companies should be taxed has been going on for years. Historically, companies have only paid income taxes in the country where profits are recorded. However, European countries are confident in their right to collect the so-called taxes on digital services, as companies receive a large amount of profit in the region. The introduction of a digital tax is also planned by the authorities of the UK, Italy and Austria.

If you notice an error, select it with the mouse and press CTRL + ENTER.

Leave a Comment