ZCZC
BCN-12
FRANCE-US-INTERNET-TAX
US sanctions on French digital tax ‘incomprehensible’: minister
PARIS, Nov 28, 2019 (BSS/AFP) – French Economy Minister Bruno Le Maire
said Wednesday it would be “incomprehensible” for the United States to slap
sanctions on France in retaliation for a digital tax on big internet
companies.
Le Maire told AFP that the OECD group of wealthy democracies was
finalising a way to tax global revenues of digital giants, many of which are
based in the United States, at which point France would rescind its own tax.
“It would be incomprehensible for the United States to engage in a logic
of sanctions and trade wars while we are close to an excellent agreement at
the OECD on digital taxation,” the minister said.
He spoke shortly after the United States Trade Representative said in
Washington that it would issue a report on Monday and “announce any proposed
action” following an investigation of France’s Digital Services Tax.
“I spoke yesterday with Treasury Secretary Steven Mnuchin who assured me
there was no suggestion of immediate sanctions,” Le Maire said.
However the French minister acknowledged that sanctions remained possible,
with products like French wines likely to be targeted.
The French digital tax applies to internet giants and is based not on
profits which are reported in countries were they are subject to low taxes,
but on actual sales in France.
Many governments are under pressure to address public anger over tech
multinationals exploiting global tax rules that date back to the 1920s to pay
only cursory taxes on their profits.
The Paris-based Organisation for Economic Co-operation and Development is
leading the talks to reach an accord next year, and has published suggestions
to bridge gaps between three competing plans.
France in particular has railed against EU rules that let US heavyweights
like Google, Apple, Facebook and Amazon declare earnings from across the bloc
in low-tax havens like Ireland or Luxembourg.
This year Paris imposed its own tax on digital giants, drawing the ire of
US President Donald Trump even though France has vowed to scrub the levy once
a global accord is in place.
France backs a proposal for a minimum global tax of 12.5 percent, Le Maire
said Tuesday.
“The latest OECD proposition is an excellent compromise for us,” he
reiterated to AFP, adding that several other countries supported that level
as well.
“All it would take is for the United States to support this proposition
which takes into account all US observations, for the problem to be solved
and for us to have a strong, fair international solution to taxing digital
activities,” the minister said.
BSS/AFP/HR/1020