US could impose 100% tariffs on French goods following France’s tax on tech giants

While French President Emmanuel Macron and U.S. President Donald Trump within the originate reached a deal on France’s tax on tech giants, the U.S. is transferring forward with retaliation tariffs that will be as high as 100% on French goods (wine, cheese, handbags…).

The US Alternate Representative published a file following an investigation into the French tax. In a separate press begin, it additionally recommends novel tariffs and says that there’ll be more investigations into the digital taxes of Austria, Italy and Turkey.

“France’s Digital Providers Tax (DST) discriminates in opposition to U.S. companies, is inconsistent with prevailing principles of world tax protection, and is unusually burdensome for affected U.S. companies,” the U.S. Alternate Representative says.

French Finance Minister Bruno Le Maire already said on French radio that such tariffs would possibly per chance well even lead to a “solid European riposte.”

Earlier this year, France voted in favor of a brand novel tax on tech giants. In represent to keep a ways from tax optimization schemes, enormous tech companies that generate significant earnings in France are taxed on their earnings generated in France.

When you happen to’re working a company that generates more than €750 million in world earnings and €25 million in France, you’ve to pay 3% of your French earnings in taxes.

This tax is namely designed for tech companies in two categories — market (Amazon’s market, Uber, Airbnb…) and promoting (Facebook, Google, Criteo…). While it isn’t designed to target American companies, the overwhelming majority of enormous tech companies that operate in France are American.

This summer, Trump criticized France’s plans on Twitter. “France honest correct place a digital tax on our immense American abilities companies. If anybody taxes them, it ought to be their home Country, the USA,” he wrote. “We are in a position to affirm a substantial reciprocal motion on Macron’s foolishness rapidly. I’ve consistently said American wine is healthier than French wine!”

Throughout the Community of Seven summit, it felt worship the French authorities and the Trump administration realized a compromise. The OECD is engaged on a approach to effectively tax tech companies in countries where they operate, with a standardized house of principles.

France promised to scrap its French tax as quickly as the OECD implements its framework and pay relief companies that overpaid earlier than the OECD framework. As an instance, if Facebook pays a kind of taxes in 2019 attributable to the French tax on tech giants and if they would score paid much less below the OECD framework, France pays relief the adaptation.

However we’re relief to sq. one and tariffs would possibly per chance well even jeopardize the OECD’s work.

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