Jack Quann
Jack Quann

09.06 11 Jul 2019


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US President Donald Trump has ordered an investigation into a proposed tax on technology companies from France.

The US said it was "very concerned" by the planned digital service tax.

The United States Trade Representative (USTR) said it had already started the investigation, under Section 301 of the 1974 Trade Act.

The French Digital Services Tax bill would impose a 3% tax on total annual revenues generated by companies providing certain digital services to, or aimed at, French users.

The tax applies to companies with total annual revenues of at least €750m globally and €25m in France.

Firms including Google, Apple, Amazon and Facebook would likely be affected.

The tax would hit some 30 companies - many of which are American - but also Chinese, German, Spanish and British firms.

The USTR says: "The services covered are ones where US firms are global leaders.

"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."

US trade representative Robert Lighthizer says: "The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.

"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."

The United States says it will continue efforts with other OECD countries to reach "a multilateral agreement to address the challenges to the international tax system posed by an increasingly digitised global economy."

Technology industry lobby group ITI has urged the US not to impose tariffs in retaliation.

"We support the US government's efforts to investigate these complex trade issues but urge it to pursue the 301 investigation in a spirit of international cooperation and without using tariffs as a remedy," Jennifer McCloskey, ITI's vice president of policy, said.

But the investigation was praised by US Senate finance committee chairman Chuck Grassley and Democrat Senator Ron Wyden.

In a joint statement, they said: "The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost US jobs and harm American workers."

"The United States would not need to pursue this path if other countries would abandon these unilateral actions and focus their energies on the multilateral process that is under way."


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Amazon Apple Chuck Grassley Digital Tax Donald Trump French Digital Services Tax Google ITI Robert Lighthizer Senator Ron Wyden USTR United States Trade Representative

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