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PARIS (AFP) – France would require online know-how giants to pay a brand new “digital tax” on their 2020 earnings, the finance ministry stated on Wednesday (Nov 25), despite Washington’s warning that it might retaliate with new tariffs on French imports.
“The companies subject to this tax have been notified,” a ministry official stated, referring particularly to the US companies Google, Amazon, Facebook and Apple, which the US says are being unfairly focused by the levy.
The French transfer dangers escalating an extended-working struggle over how to make American tech multinationals pay a bigger share of their taxes within the international locations the place they function.
Under EU legislation, American firms can declare their earnings from throughout the bloc in a single member state – generally low-tax jurisdictions comparable to Ireland or the Netherlands.
Under stress to take a tougher line, France enacted its digital tax in 2019, which requires a three per cent levy on the earnings from offering online gross sales for third-occasion retailers, in addition to on digital promoting and the sale of personal information.
But Paris reached a take care of the administration of US President Donald Trump to droop the tax whereas looking for a world digital tax deal beneath the auspices of the Organisation for Economic Co-operation and Development (OECD).
But Trump has warned that punitive duties of 25 per cent on US$1.three billion (S$1.eight billion) value of French merchandise, together with the nation’s famend cosmetics and purses.
In October, the OECD acknowledged that it might not attain a deal on a brand new world commonplace for taxing digital companies this yr as hoped, largely due to US opposition to the proposals.
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