A deal was reached between the United States and France to put an end to their dispute over the 3 per cent technology tax imposed by Paris on large tech companies. However no confirmation was provided by US President Donald Trump about whether this deal meant that his threat of retaliatory tariff to the tech tax on American tech companies aimed at the wine sector of France was also no more applicable.
According to the deal, France would be repaying the tech companies, from whom it would be collecting the taxes, the difference between the French tax and a similar tax that is planned to be drawn up and proposed by the OECD. The deal was reached between French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and Donald Trump’s White House economic adviser Larry Kudlow.
The new etch tax imposed by France at 3 per cent would be applicable on companies that generate more than 25 million euros or $27.86 million in revenues from the French market and but should also have global revenues of 750 million euros or $830 million.
However the Trump administration sees this tax by France at a direct attack on large American tech companies such as Facebook, Google and Amazon. According to the current laws in the European Union, such large American companies are allowed to book their profits from very low tax countries such as Ireland irrespective of where that revenue had been generated from.,
This trade spat between the US and France carried the possibility of another trade war front being opened by the US which is already holding trade related negotiations with the European Union. There is already some palpable tensions between the two traditional trading partners. For Macron, achieving this deal was one of the few achievements in a summit where very few concrete results have been able ot be arrived at between participating countries.
“We’ve done a lot a work ... we have a deal to overcome the difficulties between us,” Macron told a news conference alongside Trump at the end of a G7 summit in France.
According to reports quoting sources, the entire weekend was used up in finding a solution by Le Maire and his U.S. counterparts. The leaders first held meetings at the Basque countryside in the family house of the French finance minister and then again in a Biarritz restaurant at a Sunday dinner.
Macron’s “foolishness” at imposing the tech tax was criticized by Trump and had issues threats to impose import tariffs on French wine as a retaliatory measure.
Push for a digital tax to cover EU member states was made in 2018 by the French president. But it was severely resisted by a number of other member countries. The new tax was imposed by France after such a failure and was drafted and passed in July and would would be applied retrospectively from January 2019.
(Source:www.reuters.com)
According to the deal, France would be repaying the tech companies, from whom it would be collecting the taxes, the difference between the French tax and a similar tax that is planned to be drawn up and proposed by the OECD. The deal was reached between French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and Donald Trump’s White House economic adviser Larry Kudlow.
The new etch tax imposed by France at 3 per cent would be applicable on companies that generate more than 25 million euros or $27.86 million in revenues from the French market and but should also have global revenues of 750 million euros or $830 million.
However the Trump administration sees this tax by France at a direct attack on large American tech companies such as Facebook, Google and Amazon. According to the current laws in the European Union, such large American companies are allowed to book their profits from very low tax countries such as Ireland irrespective of where that revenue had been generated from.,
This trade spat between the US and France carried the possibility of another trade war front being opened by the US which is already holding trade related negotiations with the European Union. There is already some palpable tensions between the two traditional trading partners. For Macron, achieving this deal was one of the few achievements in a summit where very few concrete results have been able ot be arrived at between participating countries.
“We’ve done a lot a work ... we have a deal to overcome the difficulties between us,” Macron told a news conference alongside Trump at the end of a G7 summit in France.
According to reports quoting sources, the entire weekend was used up in finding a solution by Le Maire and his U.S. counterparts. The leaders first held meetings at the Basque countryside in the family house of the French finance minister and then again in a Biarritz restaurant at a Sunday dinner.
Macron’s “foolishness” at imposing the tech tax was criticized by Trump and had issues threats to impose import tariffs on French wine as a retaliatory measure.
Push for a digital tax to cover EU member states was made in 2018 by the French president. But it was severely resisted by a number of other member countries. The new tax was imposed by France after such a failure and was drafted and passed in July and would would be applied retrospectively from January 2019.
(Source:www.reuters.com)
