There is a new tax on “digital services” that France has passed. This new tax has caused a lot of controversy in the tech world. It is going to affect all the major American technology companies. America is planning on an investigation into this plan.
The tax involves a 3 percent tax on total revenue generated by providing services to French users. The tax is only applied to companies that make more than €750 million in global revenue and €25 million in French revenue. Google, Facebook, and Amazon will all be affected with this.
Before this new bill was passed America was already looking into the French legislation. The Office of the United States Trade Representative (USTR) made a statement regarding the tax and statements from French officials saying that they “suggest that France is unfairly targeting the tax at certain US-based technology companies.”
President Trump had ordered the investigation. USTR Robert Lighthizer said, “The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.” After the United States completes their investigation, they will figure out a response.
Business groups in America are not happy about this French proposal. The plan “would harm American businesses and workers,” stated The US Chamber of Commerce. The Information Technology Industry Council believes that this new proposal by France is “a significant and concerning departure” from international efforts as well as “an ill-disguised effort to target companies that are thought to be too powerful, too profitable, and too American.”