Towards Franco-American collision as French Senate introduces tax on digital behemoths

A view of Google's offices in New York, New York, USA, 08 November 2018.EPA-EFE/JUSTIN LANE

Towards Franco-American collision as French Senate introduces tax on digital behemoths


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The French Senate endorsed on Thursday a law that will impose a 3% tax on mostly US-based digital behemoths; the tax has already been endorsed by the National Assembly.

The so-called GAFA tax (Google, Apple, Facebook, Amazon) is opposed by Washington and closely watched in Europe. Beyond the big four, the tax is also likely to affect 30 companies from China, Germany, Spain and the UK.

However, US Trade Representative Robert Lighthizer is already expressing his concern that Paris is singling out US corporates. President Donald Trump ordered on Wednesday an investigation that could lead to tariffs targeting French products under Section 301 of the US Trade Act.

Addressing the Senate on Thursday, Finance Minister Bruno Le Maire pointed out that this is the first time in history the US is considering retaliatory measures against France, but stroke a defiant cord, noting that “France is a sovereign country {and} its decisions on tax matters are sovereign and will continue to be sovereign.”

Several countries will be looking closely on lessons to be learned from the tax. The tax targets companies that use consumer data to sell online advertising with worldwide profits of more than €750 million, of which €25 million in France. French tax authorities expect GAFA could yield €500 million.

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