Google, Facebook and Amazon Unite With Trump to Protest French Tech Tax
France’s plan to tax U.S. tech giants will bring President Donald Trump and the largest technology companies together, at least temporarily, according to Bloomberg.
Google, Facebook and Amazon all testified in Washington in support of the Trump administration’s efforts to potentially punish France for enacting a 3% tax on global tech companies with at least 750 million euros in global revenue and digital sales of 25 million euros in France.
France’s digital tax “is a sharp departure from long-established tax rules and uniquely targets a subset of businesses,” Nicholas Bramble, trade policy counsel at Google, said at the U.S. Trade Representative’s Office hearing in Washington. “French government officials have emphasized repeatedly that the” tax is intended to target foreign technology companies.
The U.S. is probing France’s new tax, which French President Emmanuel Macron signed into law last month, using a tool that could be a precursor to new tariffs or other trade restrictions. U.S. Trade Representative Robert Lighthizer could take action as soon as Aug. 26 when a comment period on the issue closes.
The effort to crack down on France has created common ground for Trump, who has called Google and Facebook “on the side of the Radical Left Democrats” and accused Amazon of avoiding taxes, and technology companies that are both worried foreign governments are looking to use American corporations as a way to collect additional tax revenue.
While Amazon has increased its profit margins, even so the French digital tax could eat into profitability, said Peter Hiltz, the online retailer’s director of international tax and policy planning. If another country, such as Spain, were to enact a tax similar to France, that tax could compound, he said. If a French buyer were to buy a product from a Spanish seller, that transaction would be taxed by both countries, he said.
The U.S. says countries considering their own version of a digital tax should focus on ongoing global talks with 130 countries on how to tax tech companies. Any future pact would likely create a whole new set of rules governing which countries have the right to tax the companies, which corporate profits are taxable, and how to resolve the inevitable disputes that would arise. A deal could be reached as soon as next year.