France risks US ire with vow to impose digital tax this year

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France will apply a new digital levy for online technology giants this year, breaking a truce with Washington over the long-running tax fight that ...

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Share this contentPARIS: France will apply a new digital levy for online technology giants this year, breaking a truce with Washington over the long-running tax fight that could prompt a round of punitive US tariffs on French goods.

Under EU law, companies in the United States can declare their profits from across the bloc in a single member state - and they mostly pick low-tax jurisdictions such as Ireland or the Netherlands.In 2019, President Emmanuel Macron's government enacted a three per cent levy on the profits from providing online sales for third-party retailers - such as Amazon's Marketplace - as well as on digital advertising and the sale of private data.

Progress on a deal was elusive, however, and in June, US Treasury Secretary Steven Mnuchin called off the talks, which were being pursued by 137 countries with a target by the end of this year.In October, the OECD acknowledged that no deal was likely before next year, largely because of US opposition to the proposals.Britain, Spain, Italy and other European countries have also announced digital taxes to give them a bigger share of the profits that tech firms make from their citizens.

It added that failure to reach a comprehensive deal would encourage more countries to take unilateral action that would only further stoke trade tensions.

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