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France passes tax on tech giants despite US threats

Becomes the first country in the EU to impose such a levy, with other nations, including UK and Germany, mulling similar taxes.

Bloomberg|
Jul 11, 2019, 11.12 PM IST
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Agencies
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A 3% tax on tech giants with at least ¤750 million in worldwide revenue and digital sales totaling ¤25 million in France.
PARIS: France won’t back off from its planned tax on companies like Facebook and Alphabet Inc’s Google even after the US suggested it may use trade tools against the levy.

The French Senate passed a bill on Thursday to impose a 3% levy on global tech companies with at least 750 million euros ($845 million) in worldwide revenue and digital sales totaling 25 million euros in France.

The US said on Wednesday that it will examine whether the tax would hurt its tech firms, using the so-called 301 investigation, the same tool President Trump deployed to impose tariffs on Chinese goods because of the country’s alleged theft of intellectual property.

France said the digital tax is in keeping with international rules, and that it won’t accept the use of trade tools to try to thwart it. “I deeply believe that between allies we can and must resolve our differences in ways other than with threats,” Finance Minister Bruno Le Maire said in a speech in the Senate. “France is a sovereign state that decides its tax measures with sovereignty and will continue to take sovereign tax decisions.”

With the passage of the bill, France will become the first country in the European Union to impose such a levy, with other nations, including the U.K. and Germany, mulling similar taxes. The law, which goes into effect retroactively as Jan. 1, 2019, targets about 30 companies around the world.
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