Friday, 12 July 2019 11:19

France passes digital tax law despite US threats

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France passes digital tax law despite US threats Pixabay

Despite US threats of an inquiry into its actions, France has passed a law to impose a 3% digital services tax on multinational technology companies like Google and Facebook.

The tax was approved by the French Senate on Thursday, a week after it was passed by the lower house, the BBC reported.

The law will cover companies that have global revenue of more than €750 million and French revenue of more than €25 million.

It will be applied from the beginning of this year and is expected to raise about €400 million.

On Wednesday, US trade representative Robert Lighthizer said an inquiry would "determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce".

France made its intentions clear last year, with Finance Minister Bruno Le Maire telling the media in December that €500 million (US$570 million) would be raised through this measure in 2019.

Reacting to Lighthizer's comments, 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 said.

Other countries have taken similar steps with the UK having put in place a digital services tax which will take effect from April 2020.

The French law, which targets companies that use the data of consumers to sell online advertising, is expected to hit Airbnb and Uber as well as companies from China and other parts of Europe.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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