France says will apply ‘digital tax’ for 2020 despite US retaliation threat

“The companies subject to this tax have been notified,” a ministry official said, referring in particular to the US firms Google, Amazon, Facebook and Apple, which the US says are being unfairly targeted by the levy.The French move risks escalating a long-running fight over how to make American tech multinationals pay a larger share of their taxes in the countries where they operate.

Under EU law, American companies can declare their profits from across the bloc in a single member state — in most cases low-tax jurisdictions such as Ireland or the Netherlands.Under pressure to take a harder line, France enacted its digital tax in 2019, which calls for a three percent levy on the profits from providing online sales for third-party retailers, as well as on digital advertising and the sale of private data.But Paris reached a deal with the administration of President Donald Trump to suspend the tax while seeking a global digital tax deal under the auspices of the Organisation for Economic Co-operation and Development (OECD).But Trump has warned that punitive duties of 25 percent on $1.3 billion worth of French products, including the country’s renowned cosmetics and handbags.In October, the OECD acknowledged that it would not reach a deal on a new global standard for taxing digital firms this year as hoped, largely because of US opposition to the proposals. 

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