This archive report was first published on 12 July 2019.
On July 11, 2019, the French Parliament passed a law to tax digital giants, making France one of the first countries to tax 'GAFA' companies, namely Google, Amazon, Facebook, and Apple.
US trade authorities have responded by launching an investigation into the French law, citing concerns that it unfairly targets US-based technology companies.
The French Digital Services Tax (DST) imposes a 3-percent tax on total annual revenues generated by some companies from providing certain digital services to, or aimed at, French users.
The tax applies only to companies with total annual revenues from the covered services of at least 750 million euros globally and 25 million euros in France.
US Trade Representative Robert Lighthizer stated, "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."
The investigation was launched under Section 301 of the Trade Act of 1974, which allows the US president to unilaterally impose tariffs or other trade restrictions on foreign countries.
The French government is expected to collect 400 million euros this year and 650 million euros by 2022 from the tax.
