France adopts pioneering tax on tech giants Google, Amazon, Facebook

France adopts pioneering tax on tech giants Google, Amazon, Facebook

US Trade Representative Robert Lighthizer said in a statement ahead of the adoption of the French law that Washington was "very concerned" it would "unfairly" target American companies.

The tax rate would be set at 3% and could hit some of America's biggest tech companies, including Amazon, Facebook and Google.

The French parliament on Thursday passed a law taxing digital firms like Google and Facebook, which have been accused of exploiting global tax loopholes.

The adoption of the law came as Britain unveiled draft legislation for a tax on digital giants, that would amount to 2.0 percent and reflect "the value derived from their United Kingdom users", the British government said.

Air France said the new tax would significantly hurt its competitiveness and represent an additional cost of over €60 million per year.

In a joint statement, they said: "The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost United States jobs and harm American workers".

"Between allies, we can, and we should, solve our differences without using threats", Bruno Le Maire said.

The new measure is expected to bring in some 182 million euros a year which will be invested in greener transport infrastructures, notably rail, she said.

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France failed to persuade European Union partners to impose a Europe-wide tax on tech giants, but is now pushing for an worldwide deal with the 34 countries of the Organisation for Economic Cooperation and Development.

Lightizer added that the services targeted by the proposed tax "are ones where US firms are global leaders" and that the proposed tax "as well as statements by officials suggest that France is unfairly targeting the tax at certain USA -based technology companies".

The large tech companies themselves, despite being targeted by the proposed French tax, are urging the Trump administration to not impose tariffs on European imports.

The French government says the tax does not specifically target USA companies and will affect European and Asian firms as well.

The "Section 301" investigation will determine if the levy poses an unfair trade practice.

"We are becoming an increasingly digital world and it will be a huge problem if we do not find a way to raise [digital] taxes", European Competition Commissioner Margrethe Vestager said in April. However, French officials stressed the law will affect around 30 companies, including some from China, Germany, Spain and the United Kingdom, not just the US.

The administration also got some bipartisan support from the top members of the Senate Finance Committee. Perhaps it might even prompt countries to finally agree on some common tax rules (imagine that).

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