France has approved a new tax on big tech companies such as Google and Amazon, according to The Wall Street Journal. The country has ignored the threat of the U.S. trade probe into whether or not the tax unfairly discriminates against American companies.
The French senate voted on the tax only hours after U.S. Trade Representative Robert Lighthizer said he would assess the tax with the same law that Trump is using during his trade war with China.
Bruno Le Maire, the French Finance Minister, shrugged off the investigation before the vote. He said, “France is a sovereign state. It makes sovereign decisions on tax matters and will continue to make sovereign decisions on tax matters. Between allies, we can and we must resolve our disputes without resorting to threats.”
Both France and the U.S. will participate in another round of multilateral talks under the Organization for Economic Cooperation and Development concerning how the corporate taxation system should be reconfigured in the digital age.
The new French law is a tax at 3% of revenue that companies reap in France from such activities as undertaking targeted advertising or running a digital marketplace.
France, along with other European countries, want the new system to allot more of the profits from Silicon Valley to their countries for taxation. The U.S., on the other hand, does not want to see these kinds of unilateral taxes. Tech companies are siding with the U.S.
Le Maire emphasized on Thursday that France will repeal the new tax as long as a “credible agreement” is found at the OECD.
“Let’s accelerate work at an international level,” Le Maire said. “Let’s find a solution at the OECD level, and work via agreements rather than threats.”
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