08/30/2019

U.S., France Strike Deal on Digital Tax

The tax impacts companies like Apple, Amazon, Facebook and Google

American and French negotiators have reached a deal on how to handle France’s new digital tax on technology giants like Apple, Amazon, Facebook and Google.

“We have reached a very good agreement,” said French President Emmanuel Macron in a joint press conference with President Donald Trump during the G7 summit Aug. 26.

As part of the deal made between French Finance Minister Bruno Le Maire, Treasury Secretary Steven Mnuchin and White House economic advisor Larry Kudlow, France has agreed to repay U.S. tech companies the difference between the French tax and a digital tax for the European Union being drafted by the Organization for Economic Cooperation and Development (OECD).

The French digital tax is a 3 percent tax on yearly revenues of tech companies that make at least 750 million euros annually and provide services to users in France. Because most of the tech companies that would be impacted are based in the U.S., the Trump administration has said the tax unfairly targets American companies. France has said its digital tax is temporary until a broader agreement is reached among European countries.

Trump had earlier threatened to impose tariffs on French wine in response to France’s tax but administration officials said this week that Trump now supports the agreement reached last week.

This article was provided to OSAE by the Power of A and ASAE's Inroads.