Tech Companies Operating in France Must Pay Digital Services Tax Starting In December

The French Finance Ministry has ordered tech giants to pay for the digital services tax introduced in the European country last year despite the U.S. government’s warning that it could slap retaliatory tariffs on French imports.

The French Finance Ministry has ordered tech giants to pay for the digital services tax introduced in the European country last year despite the U.S. government’s warning that it could slap retaliatory tariffs on French imports.

According to the French tax authorities, the tech companies were already notified in recent days. The ministry would demand payment of the tax for their 2020 earnings.

The 3% tax would affect tech firms that earn more than 25 million euros of revenue in France and at least 750 million euros of revenue worldwide. 

The tax was introduced in the European country last year. However, the French government suspended the tax collection early this year while negotiations were underway at the Organization for Economic Cooperation and Development on an overhaul of the global tax system.

The ministry decided to collect the tax starting in December after talks failed to produce a breakthrough.

“We will levy this digital taxation mid-December as we always explained to the U.S. administration,” French Finance Minister Bruno Le Maire said in a statement.

During the withdrawal of Washington from the OECD talks in June, the Trump administration pledged that it would retaliate if France decides to move forward with the tax. It warned that it could impose retaliatory tariffs on $1.3 billion in French goods, including handbags and cosmetics, as early as Jan. 6.

Earlier this week, Le Maire said he is hopeful to convince President-elect Joe Biden to re-engage the U.S. government with the OECD process to reach a deal.


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