• Advertisement
To advertise, place classifieds free ads by category in a forum as a new topic, or in the classified display ads section, or start a classifieds free blog.

France passes tax on tech giants despite US threats

France passes tax on tech giants despite US threats

Postby smix » Fri Jul 12, 2019 5:56 pm

France passes tax on tech giants despite US threats
BBC News

URL: https://www.bbc.com/news/world-europe-48947922
Category: Politics
Published: July 11, 2019

Description: France has approved a digital services tax despite threats of retaliation by the US, which argues that it unfairly targets American tech giants. The 3% tax will be levied on sales generated in France by multinational firms like Google and Facebook. The French government has argued that such firms headquartered outside the country pay little or no tax. The US administration has ordered an inquiry into the move - which could result in retaliatory tariffs. The new tax was approved by the French senate on Thursday, a week after it was passed by the lower house, the National Assembly. Any digital company with revenue of more than €750m ($850m; £670m) - of which at least €25m is generated in France - would be subject to the levy. It will be retroactively applied from early 2019, and is expected to raise about €400m this year.
Why target tech giants?
At present, they are able to pay little or no corporate tax in countries where they do not have a large physical presence. They declare most of their profits where they are headquartered. The European Commission estimates that on average traditional businesses face a 23% tax rate on their profits within the EU, while internet companies typically pay 8% or 9%. France has long argued that taxes should be based on digital, not just physical presence. It announced its own tax on big technology firms last year after EU-wide efforts stalled. An EU levy would require consensus among members, but Ireland, the Czech Republic, Sweden and Finland raised objections. France's new 3% tax will be based on sales made in the country, rather than on profits. About 30 companies will pay it - mostly US groups such as Alphabet, Apple, Facebook, Amazon and Microsoft. Chinese, German, Spanish and British firms are also affected, as well as the French online advertising firm Criteo. The French government says the tax will end if a similar measure is agreed internationally. The big tech companies have argued they are complying with national and international tax laws.
What has the US said?
The Trump administration denounced the move a day before the vote. On Wednesday trade representative Robert Lighthizer said an investigation would "determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce". The US inquiry could pave the way for punitive tariffs, which Mr Trump has imposed on several occasions since taking office. Previous investigations launched by Washington have covered European Union and Chinese trade practices. Defending the new tax on Thursday, French Finance Minister Bruno Le Maire said France was "sovereign and decided its own tax rules". "I want to tell our American friends that this should be an incentive for them to accelerate even more our work to find an agreement on the international taxation of digital services," he added.
France isolated
Analysis by Dave Lee, BBC North America technology reporter

macron-throne.jpg

This "Section 301" investigation, as it is known, has been used before as a way of eventually implementing new tariffs on countries the Trump administration feels is taking the US for a ride. If France is going to take hundreds of millions of euros from the pockets of American tech giants, the US argument might be, then why shouldn't the US earn more money from what the French do in the US? It took the same view with China and has buried itself in a trade war that has destabilised relations and has the potential to escalate even further. The digital tax is a risk for France, for it is now isolated. There had been talk of a Europe-wide tech tax, but talks fell down thanks in part to opposition from countries such as Ireland, which has benefited from being able to attract tech firms to set up their European base in the country. Other countries - such as the UK, Spain and Austria - are considering similar moves, but France is furthest along. One thing all sides agree on, however, is that in our modern, digital economy, the overhaul of how companies are taxed is long overdue. France will be hoping for one of two outcomes. Either countries follow their lead and implement their own, independent laws, limiting France's exposure. Or the move gives added energy to calls for a multilateral agreement on how digital firms should be taxed globally, putting an end to the squirreling-away of vast sums of money made by internet giants.
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)

France Approves Tax On Big Tech, And U.S. Threatens To Retaliate

Postby smix » Fri Jul 12, 2019 6:05 pm

France Approves Tax On Big Tech, And U.S. Threatens To Retaliate
NPR

URL: https://www.npr.org/2019/07/11/74068807 ... -retaliate
Category: Politics
Published: July 11, 2019

Description: French lawmakers have approved a tax on digital companies that will affect U.S. tech behemoths known in France as "Les GAFA" — Google, Amazon, Facebook and Apple. The U.S. government is already threatening to retaliate: On Wednesday, President Trump ordered a probe of the French tax. It's a sign that another trade war like the one between the U.S. and China could be stirring – except that it's with one of America's allies, and in this case, it's U.S. companies that are seen as the tax dodges. The measure was approved by France's Senate on Thursday. It will levy a 3% tax on revenue from digital services earned in France by companies that make more than 25 million euros ($28 million) in French revenue and 750 million euros ($844 million) in global revenue. It will be applied retroactively from January 2019. French officials have been frustrated that digital companies have been able to avoid taxes by establishing their European headquarters in countries such as Ireland and the Netherlands, which offer corporations low tax rates. France says it will roll back its tax if an EU levy takes effect. "Tech giants have the money," French Economy and Finance Minister Bruno Le Marie said in December, "and they make big profits thanks to French consumers." French President Emmanuel Macron has said that "big companies that make a profit in France have to pay taxes there." The European Commission calculates that digital businesses pay an effective tax rate of 9.5%, compared with 23.2% paid by traditional companies. The European Union has been considering imposing a tax on tech giants, but it has struggled to do so, prompting France to pass its own. Other countries – Austria, Italy, Spain, Poland, the Czech Republic and the U.K. — have signaled they may implement such taxes, too. The tax applies to European and Asian companies, as well, but the Trump administration says U.S. firms are being targeted. "The United States is very concerned that the digital services tax ... unfairly targets American companies," U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday. "The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce." Lighthizer said his office has begun what is called a 301 investigation, the same kind of probe the U.S. used to put tariffs on China. Officials in France defended the tax as well within its rights. "France is a sovereign state, it decides sovereignly its fiscal arrangements, and it will continue to make fiscal decisions sovereignly," Le Maire said Thursday at the Senate. He said it should be "an incentive for [the Americans] to further accelerate work on an OECD-wide international taxation solution. It seems to me better policy to deal with this fundamental issue of the taxation of digital giants." Amazon applauded the U.S. trade representative's move and criticized the French tax as poorly constructed and discriminatory. "We applaud the Trump Administration for taking decisive action against France and for signaling to all of America's trading partners that the U.S. government will not acquiesce to tax and trade policies that discriminate against American businesses," Amazon said in a statement to The Washington Post. Google told the newspaper it supports a "comprehensive and multilateral" tax agreement instead of what it called "discriminatory unilateral taxes." Le Maire said this is the first time that the U.S. has ever opened a 301 investigation concerning France. Allied countries, he said, should settle "disputes other than by threat."
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)

France approves digital tax on American tech giants, defying US trade threat

Postby smix » Fri Jul 12, 2019 6:31 pm

France approves digital tax on American tech giants, defying US trade threat
CNBC

URL: https://www.cnbc.com/2019/07/11/france- ... hreat.html
Category: Politics
Published: July 11, 2019

Description: France's Senate approved a tax on the revenues of tech giants like Google, Amazon and Facebook on Thursday, defying a warning from the President Donald Trump administration that it "unfairly targets American companies." On Wednesday, Trump ordered an investigation into France's planned "digital tax" on tech companies. The 3% tax would apply to the French revenues of roughly 30 major companies, mostly from the U.S. "France is sovereign, and France decides its own tax rules. And this will continue to be the case," France's Finance Minister Bruno Le Maire said in a statement. He added the U.S. and France could find agreements, rather than using threats, to reach a deal on the "fair taxation" of internet giants. In a statement Wednesday, U.S. Trade Representative Robert Lighthizer said the U.S. will investigate whether the French tax "is discriminatory or unreasonable and burdens or restricts United States commerce." The investigation could lead to the U.S. imposing tariffs or trade restrictions on French goods, potentially escalating the global fight over trade. Lighthizer added the U.S. will continue to support efforts by the Organization for Economic Cooperation and Development (OECD) to reach a multilateral agreement on taxes in the digital economy. The OECD has said it won't come to a conclusion on a so-called digital tax until 2020. France forged ahead with its own version of a digital tax earlier this year. The tax would apply to companies that generate worldwide revenues on their digital services of at least 750 million euros ($845 million), with 25 million euros ($28 million) from within France. Le Maire has said the tax would raise up to 500 million euros ($565 million) per year. In a statement, Amazon said the French tax is "poorly constructed" and "discriminatory," adding it will cause "significant harm to American and French consumers alike." "We applaud the Trump Administration for taking decisive action against France and for signaling to all of America's trading partners that the U.S. government will not acquiesce to tax and trade policies that discriminate against American businesses," the Amazon statement said.
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)

Trump Administration Threatens to Extend Trade War to France Over 3% Tax on Big Tech Companies

Postby smix » Fri Jul 12, 2019 6:36 pm

Trump Administration Threatens to Extend Trade War to France Over 3% Tax on Big Tech Companies
Time

URL: https://time.com/5624371/trump-administ ... companies/
Category: Politics
Published: June 11, 2019

Description: The Trump Administration is threatening the extend its trade war to France as the country prepares to hit big tech companies––many of them American––with a new tax. A 3% levy on tech giants was approved by the French Senate on Thursday, despite it upsetting the U.S., which has announced it has launched an inquiry into the law. “The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” said U.S. Trade Representative Robert Lighthizer in a statement. “The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.” Any digital company with revenue over €750 million (about $850 million)––of which €25 million is generated in France––will be subjected to the 3% levy, which will be based on total revenue generated in the country, rather than profits. France is the first country in Europe to introduce this kind of tax. It would hit about 30 companies, including Google, Apple, Facebook and Amazon. It will also apply to companies from China, Germany, Spain and the U.K. and one French company. Global tech companies have been accused of avoiding tax by shifting profits to countries with very low taxes, where they have headquarters, rather than where they make their sales. “We must act against the perverse effects of a regulatory and fiscal framework that allow digital giants to grow without any limits and without any control," French Finance Minister Bruno Le Maire said when he introduced the bill earlier this year. The tax faced criticism from tech executives, who said it would damage French President Emmanuel Macron’s attempt to transform the country into a “start-up nation.” “It’s quite possible that there will be heightened trade tensions between the U.S. and France as the Americans view the digital tax as unfairly targeting U.S. tech companies which falls afoul of 'America First,' the doctrine that guides U.S. economic policy," Linda Yueh, an adjunct professor of economics at the London Business School, said in an email. But, she added, other countries are already looking at new taxes on big tech companies. "France is unlikely to be alone," Yueh said. The tax will be retrospectively applied from early 2019, raising around €400m ($450m) for the French government this year.
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)

The US is right to threaten tariffs over France's tech tax

Postby smix » Fri Jul 12, 2019 7:48 pm

The US is right to threaten tariffs over France's tech tax
Washington Examiner

URL: https://www.washingtonexaminer.com/opin ... s-tech-tax
Category: Politics
Published: July 11, 2019

Description: The Trump administration is right to threaten France with new tariffs over the new "technology tax" which passed through the French legislature on Thursday. I'm a free trader, but the moral cause for action here is clear. France's digital services tax is specifically designed to affect American technology firms such as Facebook, Google, and YouTube, and to provide comparative advantage to French firms. Although its rate would be only 3%, the tax would fall predominantly on American firms rather than French companies. And seeing as U.S. technology companies are the evolving crown jewels of our economy, we must protect from being bullied in foreign markets. The French government's excuses for this measure are weak. France claims the tax is just because it would raise revenue from digital firms that avoid paying the same average rate of tax as other companies. But this assessment is based on flawed data extrapolation by the European Commission. As Daniel Bunn of the Tax Foundation points out, "The difference between what the studies show and what the Commission claims is in the metric. Dr. Spengel and his coauthors analyzed the tax rate that applies to the marginal investment by a digital firm. This is different from an average tax rate. The marginal tax rate applies to the next dollar of income earned, while the average rate is the amount of tax divided by total income." Bunn also notes that French technology firms receive very generous government subsidies. Oh, and French-domiciled firms that fall under the digital tax's remit can also offset its costs against their corporate tax obligations! In short, this is standard-fare French protectionism. It is designed to penalize American companies that provide a valued service to French consumers, and the United States has every right to respond in kind.
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)

French Senate approves tax as U.S. opens digital levy probe

Postby smix » Sat Jul 13, 2019 2:30 am

French Senate approves tax as U.S. opens digital levy probe
Reuters

URL: https://www.reuters.com/article/us-fran ... SKCN1U60UQ
Category: technologyNews
Published: Thu, 11 Jul 2019 11:21:00 -0400

Description: France's Senate gave final approval to a tax on big technology companies on Thursday, potentially opening up a new front in a trade row between Washington and the European Union. President Donald Trump on Wednesday ordered an investigation into the tax, which could lead to the United States imposing new tariffs or other trade restrictions. “Between allies, we can and should solve our disputes not by threats but through other ways,” Finance Minister Bruno Le Maire told senators before the final vote. The 3% levy will apply to revenue from digital services earned in France by firms with more than 25 million euros in French revenue and 750 million euros ($845 million) worldwide. It is due to kick in retroactively from the start of 2019. France pushed ahead with the tax after EU countries failed to agree a levy valid across the bloc in the face of opposition from Ireland, Denmark, Sweden and Finland. “France is a sovereign country, its decisions on tax matters are sovereign and will continue to be sovereign,” Le Maire said. Other EU countries including Austria, Britain, Spain and Italy have also announced plans for their own digital taxes. They say a levy is needed because big, multinational internet companies such as Facebook and Amazon are currently able to book profits in low-tax countries like Ireland, no matter where the revenue originates. Political pressure to respond has been growing as local retailers in high streets and online have been disadvantaged; French President Emmanuel Macron has said that taxing big tech more heavily is an issue of social justice. However, Irish Finance Minister Paschal Donohoe said in May that national taxes targeting mostly U.S.-based digital firms were “highly likely to exacerbate global trade tensions and damage cross-border trade and investment”, and would make it harder to reach agreement on a global reform. The ASIC French lobby representing firms like Facebook, Google, Amazon, Twitter and Airbnb warned of a wider impact. “By attempting to unilaterally overtax American players, Bruno Le Maire has triggered a trade war that penalizes French technology today and will penalize tomorrow many sectors that make the French economy successful, including wine, automobiles and luxury,” ASIC president Giuseppe de Martino said .
TRADE ROW
The digital tax spat is separate from the transatlantic trade row, but could be used by Trump to try to obtain EU concessions on the trade front. The United States and the EU have threatened to impose billions of dollars of tit-for-tat tariffs on planes, tractors and food in a nearly 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. planemaker Boeing Co and its European rival, Airbus SE. Trump has also imposed new tariffs on imports of EU steel and aluminum - and has threatened punitive duties on cars and auto parts if the two sides fail to reach an overall trade deal. Plans to launch trade talks between Washington and Brussels have, however, been hampered by U.S. tariffs on steel and by EU states’ reluctance to include farm products in the talks. The European Commission has estimated that multinational digital companies with investments in the EU are on average taxed at a rate 14 percentage points below that of other firms. “We are merely re-establishing fiscal justice. We want to create taxation for the 21st century that is fair and efficient,” Le Maire told senators. “We want to impose on these new business models the same rules that apply to all other economic activities.” Paris has pledged to drop its tax as soon as an international accord is reached at the Organization for Economic Cooperation and Development on overhauling cross-border tax rules for the digital era. This is expected by the end of 2020. The French government says the tax does not target U.S. companies and will affect European and Asian firms as well. The legislation should be enacted within 21 days, a spokeswoman for the Senate said, unless the government or lawmakers ask for a final review by the Constitutional Council. However, that is unlikely as the bill found wide backing among senators even though some voiced concern about double taxation as corporation tax is based on profit and the digital tax is based on revenues.



U.S. tech industry leaders: French digital service tax harms global tax reform
Reuters

URL: https://www.reuters.com/article/us-fran ... SKCN1V91UC
Category: Business
Published: August 19, 2019

Description: WASHINGTON (Reuters) - Major tech firms and U.S. tech industry groups said on Monday that France’s new digital services tax undermines the global tax regime and multilateral efforts to reform it. Alphabet Inc’s Google, Facebook Inc and Amazon.com Inc and major trade associations testified Monday against the tax at a hearing before the U.S. Trade Representative’s office and other government officials. The French Senate in July approved a 3% levy that will apply to revenue from digital services earned in France by companies with more than 25 million euros in French revenue and 750 million euros ($838 million) worldwide. “It does depart from even the outlines of what we expect out of the OECD,” said Daniel Bunn, director of global projects at the Tax Foundation, commenting on OECD-wide efforts to create a global agreement on taxing the digital economy. The U.S. Chamber of Commerce said the tax will generate revenue of approximately 500 million euros ($554 million) per year “a large majority of which will be paid by U.S. firms” and will cost U.S. firms millions to conduct “significant re-engineering of accounting systems to ensure that they can accurately assess” liability. Major tech firms warned of increased costs. “Unilateral measures like the DST are harmful to Facebook and the digital economy,” Alan Lee, Facebook’s global head of tax policy, said in a statement. Matthew Schruers, chief operating officer at the Computer and Communications Industry Association (CCIA), representing companies like Intel Corp, eBay Inc and Netflix Inc, said at the hearing that the tax “undermines the progress made” on a new tax system on the digital economy and “supports an aggressive response to this problem.” “CCIA believes that this action warrants a substantial, proportionate response from the United States,” Schruers said, adding the tax “unquestionably” targets U.S. firms in an attempt by the French government to “ringfence” them. Amazon’s international tax policy director Peter Hiltz said more than 10,000 French-based businesses are selling on Amazon’s online stores and notified them certain fees will increase by 3% for Amazon.fr sales starting Oct. 1. Last month, President Donald Trump threatened to tax French wines or other products in response. USTR could impose new tariffs after a public comment period ends Aug. 26. Other EU countries have also announced plans for their own digital taxes, arguing a levy is needed because big, multinational internet companies book profits in low-tax countries like Ireland, no matter where the revenue originates.
User avatar
smix
 
Posts: 2119200
Images: 1
Joined: Sat Aug 10, 2013 8:05 am
Blog: View Blog (0)


  • Similar Topics
    Replies
    Views
    Last post

Return to Business Regulation, Licenses, Taxation, Tariffs, Antitrust


Mobile Device
  • 1
  • FREE CLASSIFIED ADS
    Free Classified Ads
    There are 3 ways to advertise - your choice: you can place free ads in a forum topic, in the classified display ads section, or you may start your own free blog. Please select the appropriate category and forum for the ad content before you post. Do not spam.
    Caveat emptor - let the buyer beware. Deal at your own risk and peril.
  • Advertisement