Economy

U.S. 'concern' over French plan to tax tech giants

U.S. 'concern' over French plan to tax tech giants”

Donald Trump has ordered an investigation into French plans for a "tech tax" on internet companies that could see the USA impose retaliatory tariffs on French imports.

Lighthizer's agency will investigate the tax under Section 301 of the Trade Act of 1974 - the same provision the Trump administration used a year ago to probe China's technology policies, leading to tariffs on $250 billion worth of Chinese imports. "The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain us -based technology companies".

On Wednesday US Trade Representative Robert Lighthizer announced a "Section 301 investigation" into France's digital services tax, a proposed 3pc revenue levy on companies such as Facebook and Google that provide digital services to French users.

The investigation could spark other countries to tax tech giants following belief the USA companies aren't paying enough tax worldwide.

The French levy would impose a 3 per cent tax on certain revenue that large tech companies earn inside France.

Macron's officials have yet to comment on the probe.

In April, French Finance Minister Bruno Le Maire said that France was determined to implement the tax, called "GAFA" by the French media (an acronym that means Google, Apple, Facebook and Amazon), on the largest digital companies.

The tech industry warns it could lead to higher costs for consumers.

"France's move to enact a unilateral, national digital tax opens the door to a fragmented, inefficient global tax system that would reduce business certainty and impede innovation, job creation, and economic growth worldwide", Ms Jennifer McCloskey, vice president of policy at ITI, a U.S. tech-industry association, said in a statement this week.

Lighthizer said the United States "will continue its efforts with other countries at the OECD to reach a multilateral agreement to address the challenges to the worldwide tax system posed by an increasingly digitized global economy".

Google has since defended its global tax payments and said it supports a new "comprehensive and multilateral agreement" on tax.

"Today's move by USTR is an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe", Jordan Haas, the director of trade policy for the Internet Association, said in a statement.

Amazon founder and chief executive Jeff Bezos owns The Washington Post.



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