France, US have 15 days to settle digital tax dispute

Washington says US companies such as Google, Apple, Facebook and Amazon have been singled out by a new French tax.
Washington says US companies such as Google, Apple, Facebook and Amazon have been singled out by a new French tax.PHOTO: AFP

PARIS (AFP) - France and the United States have given themselves 15 days to settle a dispute over the taxation of US tech giants, French Finance Minister Bruno Le Maire said on Tuesday (Jan 7).

Mr Le Maire said he had a "long discussion" over the telephone on Monday with his US counterpart, Mr Steven Mnuchin.

"We have given ourselves exactly 15 days" to solve the issue at the Organisation for Economic Cooperation and Development, Mr Le Maire said, urging Washington not to impose sanctions during this time.

He was speaking at a meeting in Paris with European Union Trade Commissioner Phil Hogan, who said the EU would "stand together with France" in the dispute.

US President Donald Trump last month threatened to punish Paris for a new tax on tech giants such as Netflix and Amazon, unveiling sky-high retaliatory duties on US$2.4 billion (S$3.24 billion) of French wines, make-up and leather handbags.

On Monday, Mr Le Maire urged Washington to renounce the threatened sanctions and warned of possible EU retaliation.

"This trade war is in no one's interest and I call on our American friends to display wisdom, to return to their senses," he told France Inter radio.

He said his meeting with Mr Hogan would "study the possibility of commercial retaliation".

France last year approved a levy on tech firms as international efforts dragged on to find a new model to tax revenues earned via online sales and advertising.

 
 

Tech companies pay little in taxes in many countries in which they are not physically present.

The levy will see them paying up to 3 per cent of their revenues earned in France.

Washington says US companies such as Google, Apple, Facebook and Amazon have been singled out by the French tax.