{"id":120716,"date":"2020-11-25T17:29:18","date_gmt":"2020-11-25T14:29:18","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/france-risks-us-ire-with-vow-to-impose-digital-tax-this-year\/"},"modified":"2020-11-25T17:29:18","modified_gmt":"2020-11-25T14:29:18","slug":"france-risks-us-ire-with-vow-to-impose-digital-tax-this-year","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/france-risks-us-ire-with-vow-to-impose-digital-tax-this-year\/","title":{"rendered":"#France risks US ire with vow to impose digital tax this year"},"content":{"rendered":"

“#France risks US ire with vow to impose digital tax this year<\/strong>”<\/p>\n

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\n The French call them the ‘GAFA’
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France will enforce a new digital levy for online technology<\/a> giants this year, breaking a truce with Washington over the long-running tax fight that could prompt a round of punitive US tariffs on French goods.<\/p>\n

“The companies subject to this tax have been notified,” a French finance ministry official said Wednesday, referring in particular to Google, Amazon, Facebook<\/a> and App<\/a>le, collectively referred to as the “GAFA” in France.<\/p>\n

A deposit on the estimated taxes owed will be required in December, with the remainder due next year, the official said.<\/p>\n

US President Donald Trump has assailed the tax as unfairly targeting American tech heavyweights, and last year threatened import duties of 25 percent on $1.3 billion worth of French products, including cosmetics and handbags by renowned brands.<\/p>\n

The US Trade Representative did not respond to a request for comment from AFP.<\/p>\n

France and other European countries are taking action after intense public pressure to make US multinationals pay a larger share of their revenues in taxes in the countries where they operate.<\/p>\n

Under EU law, companies in the United States can declare profits from across the bloc in a single member state\u2014and most pick low-tax jurisdictions such as Ireland or the Netherlands.<\/p>\n

In 2019, President Emmanuel Macron’s government enacted a three-percent levy on the profits from providing online sales for third-party retailers\u2014such as Amazon’s Marketplace\u2014as well as on digital advertising and the sale of private data.<\/p>\n

That year the taxes brought in around 400 million euros ($475 million), an amount expected to grow steadily in the coming years.<\/p>\n

But Paris struck a deal with Trump’s administration last year to suspend collection of the levy while seeking a global digital tax deal under the auspices of the Organisation for Economic Cooperation and Development (OECD).<\/p>\n

Progress on a deal has been elusive, however, and in June, US Treasury Secretary Steven Mnuchin called off the talks, which were being pursued by 137 countries with a target of securing an accord by the end of this year.<\/p>\n

In October, the OECD acknowledged that no deal was likely before 2021, largely because of US opposition to the proposals.<\/p>\n

“We suspended the collection of this tax so that the OECD talks could finish,” French finance minister Bruno Le Maire said last month.
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“These talks have failed, so we will collect taxes from these digital giants in December,” he warned.<\/p>\n

Biden hopes?<\/b><\/p>\n

Britain, Spain, Italy and other European countries have also announced digital taxes to give them a bigger share of the profits that tech firms make from their citizens.<\/p>\n

The surge in sales for online retailers during the COVID-19 lockdowns across Europe this year raised pressure on governments to take a tougher fiscal stance, not least to help pay for massive aid programmes for businesses forced to close.<\/p>\n

But France has spearheaded the effort to wrest a compromise from Washington, and Wednesday’s announcement might reflect hopes in Paris that the incoming administration of Joe Biden will prove more amenable to a global deal.<\/p>\n

“The COVID-19 pandemic makes the need for a solution even more compelling,” the OECD said last month.<\/p>\n

It added that failure to reach a comprehensive accord would encourage more countries to take unilateral action that would only stoke trade tensions further.<\/p>\n

“We remain supportive of the OECD plan,” the French finance ministry official said, adding that France also hoped to see a common European position on taxing digital giants in early 2021.<\/p>\n

The OECD proposals address two issues\u2014how to tax firms in every country where they operate, and how to ensure each country gets a fair share of a multinational’s taxes.<\/p>\n

An accord would likely set a minimum base tax, potentially of 12.5 percent, that would apply to every company no matter where it is based or declares its income.<\/p>\n

The digital tax fight is just one front in the trans-Atlantic trade battle launched by Trump\u2014last year his administration imposed 25 percent tariffs on wine, cheese, olives and other European delicacies in a battle over subsidies to planemaker Airbus.<\/p>\n

The EU responded this month with its own round of tariffs on US imports after the World Trade Organization faulted Washington over state aid for Boeing.\n <\/p>\n\n

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Global deal on taxing tech giants still beyond reach: OECD\n <\/p><\/div>\n

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\n \u00a9 2020 AFP<\/p>\n

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\n France risks US ire with vow to impose digital tax this year (2020, November 25)
\n retrieved 26 November 2020
\n from https:\/\/techxplore.com\/news<\/a>\/2020-11-france-ire-vow-impose-digital.html<\/p>\n

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