France is demanding a digital tax from giants despite a US warning

France is demanding a digital tax from giants despite a US warning

France will require online technology giants to pay a new "digital tax" on their revenues in 2020. Despite warnings from Washington that it could respond with new tariffs on French imports. This was stated on Wednesday by the Ministry of Finance in Paris. "The companies subject to this tax have been notified," the ministry said, adding that it concerns groups such as Google, Amazon, Facebook and Apple.

The tax can increase the tension

French officials confirmed that these companies had received a notification in recent days requesting payment of the 2020 tax. The tax collection, which Washington cites as an example of unfair trade practices because it greatly affects American companies, could once again increase tensions on both sides of the Atlantic and lead to new tariffs on Europe a few weeks before the inauguration of new US President Joe Biden. The U.S. Attorney's Office is now planning to impose a 25% duty of $ 1.3 billion (€ 1.10 billion) on handbags and cosmetics from France, initially threatening to impose a 100% duty on champagne and cheese. Several other governments have already introduced or are planning to introduce their own tax on digital services. They claim that technology companies pay too little tax on the profits they make in many countries. Partly because they have registered in low-tax countries such as Ireland, where they pay income tax throughout the European Union (EU). Paris' demand for a tax marks the end of the ceasefire with Washington. In January, the two sides agreed to allow more time during the year to negotiate a multilateral fiscal framework under the auspices of the Organization for Economic Co-operation and Development (OECD). France thus agreed to temporarily suspend the collection of its digital tax.