This archive report was first published on 20 August 2019.
France's digital tax, approved on July 11, has sparked a heated debate among global tech giants. The tax, which Washington considers unfair, is the latest bone of contention in the transatlantic trade disputes.
US President Donald Trump is reportedly considering retaliatory measures, including punitive tariffs on French wine imports, prompting an investigation by the Office of the US Trade Representative (USTR).
The tax, which adds 3% to the total annual revenues of companies providing services to French consumers, applies only to the largest tech companies, mostly US-based. This has led to complaints from companies like Amazon, where France represents the second-largest European market for e-commerce.
"The tax creates a double taxation," said Peter Hiltz, director of tax planning for Amazon. "Amazon cannot absorb the expenses, and the company has already informed partners that their fee will increase starting October 1," he added.
Other tech giants, including Google and Facebook, have also expressed their concerns about the tax. "The tax negatively impacts Amazon and thousands of small and medium businesses," Hiltz said.
The companies argue that the tax is discriminatory and unfair, as it only targets a handful of internet businesses while other sectors are becoming increasingly digital.
