A few days ago, the United States announced that it took upon the decision to investigate France’s proposed digital tax in order to determine whether or not the country unfairly treats and targets companies which belong to the US. Even with this threat in mind, it is now reported that the French government has approved the tax and has taken upon the decision to go forward with it.
The details which are provided by the BBC state that the French senate has indeed approved the tax, despite the threat of an investigation to be carried upon by the US. As far as the tax is concerned : it targets any digital company, including Apple, with revenue of more than $750 million – at least $28 million of which is generated in France.
The tax goes on to target around 30 different companies – and these include the likes of Apple, to the likes of Alphabet, Facebook, Microsoft and Amazon.
Under this new legislation, all such tech companies will be required to pay a three percent tax on sales which are made in the country. It’s worthy to note here that the tax will be imposed on sales – not profits. The latest tax by the French government will be applied from the beginning of this year, as the French government expects and hopes to raise more than $400 million in 2019.
The investigation from the US side on the other hand aims to come to the conclusion of whether or not the tax unfairly treats American companies. To this France has responded by saying that the goal for its government is to ensure that tech giants pay their fair share of tax in countries in which they do not have a large physical presence.
And while the country has passed its own tax, it also continues to push for a similar tax across the whole of the European Union. The country has claimed that if a similar measure was to take place on a more global scale, it will end its tax in favor of international implementation.
Robert Lighthizer – who happens to be the US Trade Representative has one year to investigate the tax. There have been reports which suggest that as a direct consequence of the actions of the French government, the US could end up imposing new tariffs or other trade restrictions on France.