He said France’s tax is meant as a temporary
measure pending negotiations on an
international deal that France wants to work out
“hand in hand with our American friends.”
The 3% tax that went into force this week mainly
concerns companies that use consumer data to
sell online advertising.
It’s designed to stop multinationals from
avoiding taxes by setting up European
headquarters in low-tax European Union
countries. Currently, companies such as Google,
Amazon, Facebook, Apple, Airbnb and Uber
pay very little tax on their significant business in
countries like France.
The Trump administration says the tax is
discriminatory against U.S. business.
In fact, it targets any digital company with yearly
global sales worth more than 750 million euros
($835 million) and French revenue exceeding
25 million euros ($27 million). It should affect
about 30 companies, based in the U.S, China and
Europe — including France.
The revenue threshold is supposed to allow
more room for startups. France argues that tech
companies are abusing their market dominance,
notably through tax avoidance, and preventing
others from a fair chance of competing.
Also, the tax only concerns revenues earned in
France — not sales in the U.S. or elsewhere.
U.S. Trade Representative Robert Lighthizer
began an investigation earlier this month to
determine whether the tax is discriminatory
or unreasonable and restricts U.S. commerce.
Such a finding would allow Trump to levy
retaliatory tariffs.