International France Imposes New Digital Tax Targetting Big U.S Tech Firms With New "GAFA" Law

[Arkain2K]

With this new "GAFA" law, France will now unilaterally begins taxing the revenue from large U.S companies who do business in France, even though those companies have already established their E.U headquarters in E.U countries with lower tax rates (such as Ireland, Netherlands, Luxembourg) and pay the income tax on their European profits there.

Expect plenty of lawsuits on its legality coming up on the horizon, and possible retaliation from the U.S government against the French.

France Approves Digital Tax On Big U.S Tech Companies
July 11, 2019

French Economy and Finance Minister Bruno Le Maire, who championed the measure, is seen here on Wednesday in Paris.​

French lawmakers have approved a tax on digital companies that will affect U.S. tech behemoths known in France as "Les GAFA" — Google, Amazon, Facebook and Apple.

The U.S. government is already threatening to retaliate: On Wednesday, President Trump ordered a probe of the French tax. It's a sign that another trade war like the one between the U.S. and China could be stirring – except that it's with one of America's allies, and in this case, it's U.S. companies that are seen as the tax dodges.

The measure was approved by France's Senate on Thursday. It will levy a 3% tax on revenue from digital services earned in France by companies that make more than 25 million euros ($28 million) in French revenue and 750 million euros ($844 million) in global revenue. It will be applied retroactively from January 2019.

French officials have been frustrated that digital companies have been able to avoid taxes by establishing their European headquarters in countries such as Ireland and the Netherlands, which offer corporations low tax rates. France says it will roll back its tax if an EU levy takes effect.

"Tech giants have the money," French Economy and Finance Minister Bruno Le Marie said in December, "and they make big profits thanks to French consumers." French President Emmanuel Macron has said that "big companies that make a profit in France have to pay taxes there."

The European Commission calculates that digital businesses pay an effective tax rate of 9.5%, compared with 23.2% paid by traditional companies.

The European Union has been considering imposing a tax on tech giants, but it has struggled to do so, prompting France to pass its own. Other countries – Austria, Italy, Spain, Poland, the Czech Republic and the U.K. — have signaled they may implement such taxes, too.

The tax applies to European and Asian companies, as well, but the Trump administration says U.S. firms are being targeted.

"The United States is very concerned that the digital services tax ... unfairly targets American companies," U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday. "The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce."

Lighthizer said his office has begun what is called a 301 investigation, the same kind of probe the U.S. used to put tariffs on China.

Officials in France defended the tax as well within its rights.

"France is a sovereign state, it decides sovereignly its fiscal arrangements, and it will continue to make fiscal decisions sovereignly," Le Maire said Thursday at the Senate.

He said it should be "an incentive for [the Americans] to further accelerate work on an OECD-wide international taxation solution. It seems to me better policy to deal with this fundamental issue of the taxation of digital giants."

Amazon applauded the U.S. trade representative's move and criticized the French tax as poorly constructed and discriminatory.

"We applaud the Trump Administration for taking decisive action against France and for signaling to all of America's trading partners that the U.S. government will not acquiesce to tax and trade policies that discriminate against American businesses," Amazon said in a statement to The Washington Post.

Google told the newspaper it supports a "comprehensive and multilateral" tax agreement instead of what it called "discriminatory unilateral taxes."

Le Maire said this is the first time that the U.S. has ever opened a 301 investigation concerning France. Allied countries, he said, should settle "disputes other than by threat."

https://www.npr.org/2019/07/11/7406...ax-on-big-tech-and-u-s-threatens-to-retaliate

 

[Arkain2K]

Beware. Other Nations Will Follow France With Their Own Digital Tax.
The international tax system is behind the times. But we need coordinated reform.
By Lilian V. Faulhaber, Georgetown University Law Center | July 15, 2019​

​

Last Thursday, the French Senate passed a digital services tax, which would impose an entirely new tax on large multinationals that provide digital services to consumers or users in France.

Digital services include everything from providing a platform for selling goods and services online to targeting advertising based on user data, and the tax applies to gross revenue from such services. French politicians and media outlets have referred to this as a “GAFA tax,” meaning that it is designed to apply primarily to companies such as Google, Apple, Facebook and Amazon — in other words, multinational tech companies based in the United States.

The digital services tax awaits the signature of President Emmanuel Macron, who has expressed support for the measure, and it could go into effect within the next few weeks. But it has already caused significant controversy, with the United States trade representative opening an investigation into whether the tax discriminates against American companies, which in turn could lead to trade sanctions against France.

The French tax is not just a unilateral move by one country in need of revenue. It is part of a much larger trend, with countries over the past few years proposing or putting in place a veritable alphabet soup of new international tax provisions. They have included Britain’s DPT (diverted profits tax), Australia’s MAAL (multinational anti-avoidance law), and India’s SEP (significant economic presence) test, to name but a few. At the same time, the European Union, Spain, Britain and several other countries have all seriously contemplated digital services taxes like the one just passed by France.

These unilateral developments differ in their specifics, but they all seek to tax multinationals on revenue that countries believe they should have a right to tax, even if international tax rules do not grant them that right. In other words, they all reflect a view that the international tax system has failed to keep up with changes in the economy.

The general outlines of that system originated in the early 20th century, and all of these recent proposals and provisions suggest that it needs to be updated for a world in which companies can make significant amounts of income without ever being physically present in a country or selling any tangible goods.

In response to these many unilateral measures, the Organization for Economic Cooperation and Development is working with 131 countries to reach a consensus on an international solution by the end of 2020. Both France and the United States are involved in the organization’s work, but France’s digital services tax and the American response raise questions about what the future holds for the international tax system.

One possible path is for countries to follow France’s lead and impose their own digital services taxes. The downsides of this are not only that the United States may take retaliatory measures but also that such taxes could subject companies to layers of new taxes, all with slightly different rates, definitions of digital services and determinations of taxing rights. This could lead to the same revenue being taxed multiple times or could make it harder for countries to get what they see as their due if others have already staked a claim to that revenue.

Another possible path would be for countries to see France’s move as a portent of the disorder that could arise if they do not reach an agreement at the international level. This could push them to participate more fully in the O.E.C.D.’s digital tax project. The proposals being considered by that group could lead to significant changes to the international tax system, with the potential for increased taxes, taxation in more countries and new rules for companies.

But the outcome would represent an international solution. The new rules imposed would be coordinated rather than layered over one another, which could offer companies more opportunities to limit double taxation or make use of dispute resolution mechanisms.

France’s planned tax is a clear warning: Unless a broad consensus can be reached on reforming the international tax system, other nations are likely to follow suit, and American companies will face a cascade of different taxes from dozens of nations that will prove onerous and costly.

https://www.nytimes.com/2019/07/15/opinion/france-internet-tax.html

​

 

[Arkain2K]

France is introducing a new digital tax on tech companies - so what impact will that have in Ireland?
Some of the world’s biggest tech giants, including Google and Facebook, have headquarters here.
Jul 18th, 2019

Last week, France inched closer to making its digital services tax a reality when its senate passed a new levy.

The rules will impose a 3% annual tax on revenue generated in France by digital companies that have more than €750 million in global revenues every year.

In particular, it has targeted companies whose revenues stem from the harnessing of consumer data to sell ads.

The tax has been ushered in by Emmanuel Macron’s finance minister Bruno Le Maire, who was a supporter of an EU-wide digital services tax before talks paused earlier this year.

The US isn’t pleased about this unilateral move and has opened an investigation into the tax, claiming it unfairly targets American companies.

What has been the global reaction?

Given the number of tech firms that are American, and their expansive reach, the French tax disproportionately impacts US companies – though one Norwegian firm that does significant business in France warned that it will be unfairly affected.

The US investigation could very well result in retaliatory tariffs – exacerbating already strained global trade relations.

The probe, known as a Section 301 investigation, is the same method used by the Trump administration to impose tariffs against China.

In response, Le Maire said that the two sides “can and must sort out differences in other ways than by using threats” but has not backed down.

While Le Maire and Steven Mnuchin, the US Treasury secretary, were able to have a chat at a meeting of G7 ministers in Chantilly this week, a compromise seems no closer.

What about Ireland?

Any discussions of tech multinationals’ tax situations inevitably thrusts Ireland into the spotlight once again.

As the home of Google, Facebook, Apple and an assortment of others, this gallery of giants has been often championed as Ireland’s foreign direct investment (FDI) successes, creating thousands of jobs.

But for many years, Ireland’s low corporation tax rate of 12.5% has drawn the ire of lawmakers on the continent – not to mention the matter of Apple and the €13 billion.

France moved forward with its own tech tax after negotiations for an EU-wide levy halted earlier this year, pending the outcome of talks at the Organisation for Economic Cooperation and Development (OECD).

Ireland and other countries like Sweden and Finland put the brakes on an EU tax, which requires all members to be onboard. Ireland seemingly dodged a bullet for now but the issue of digital tax is not going away.

It has been taken into the hands of individual member states – France’s effort is by far the most advanced.

The Czech Republic has been mulling its own levy that would slap on a 7% charge on the so-called ‘GAFA’ companies (Google, Apple, Facebook, Amazon) and Austria is considering a 3% tax.

Each country’s efforts are different but the core is the same – making Big Tech cough up.

Any efforts that force large tech companies to pay taxes on revenues in each country will greatly damage Ireland’s attractiveness to FDI firms looking to base operations and revenue here.

A local or global approach?

Ireland has remained steadfast in its position that any changes to tech tax policy should be handled at a global-level through the OECD.

Susan Kilty, head of tax at PwC Ireland, said that unilateral efforts, such as France’s, would cause disruptions to this.

“The unilateral action by France – even if it is interim in nature – is one example of the unilateral type action the OECD are expressly working to avoid,” she said.

Kilty added that it would not be practical for the European Commission to revisit its tax plans until the OECD completes its work.

Germany has favoured a global approach too so Ireland may have an unlikely ally on that front.

“Minister Donohoe has been consistent in his message that challenges in international tax are best addressed by finding a sustainable globally agreed solution through the OECD,” Kilty added.

“The US has also consistently supported this approach. Aligning all jurisdictions to ensure there is a limit on the amount of unilateral action will be paramount as the digital tax agenda progresses over the next 12 months.”

In the meantime, France has not shirked under pressure from the US and this week, at a meeting of G7 finance ministers, it sought international support for its plans. With France currently holding the G7 presidency, the issue is staying on the table.

https://www.thejournal.ie/france-digital-tax-ireland-3-4731633-Jul2019/

 

[milliniar]

I got no problem with trillion dollar companies paying more tax.

Okay so they are not all trillion dollar companies, but at the end it is closing loopholes which I am for.

 

[Arkain2K]

U.S. Weighs Strategy to Strike Back at French Digital Tax
Aug. 16, 2019

The office of U.S. Trade Representative Robert Lighthizer will solicit feedback on France’s new digital services tax from industry groups, practitioners, and the public at an Aug. 19 hearing.​

France’s new digital services tax faces scrutiny as the U.S. takes the next step toward possible tariffs or other trade retaliation.

The U.S. is trying to determine whether the French measure burdens commerce by discriminating against or imposing an unreasonable burden on its companies—and how to respond.

The U.S. Trade Representative’s office has scheduled an Aug. 19 hearing to solicit feedback from companies, industry groups, tax and trade practitioners, and the public.

Why Is France Taxing Tech Companies?

Long-standing global norms give taxing authority to countries where companies are headquartered and perform functions like developing intellectual property. Digital companies can do business in countries without being physically present, so profits aren’t taxed there. France, like a number of other countries, argues that it should be able to tax the businesses because French users create value by viewing ads, making purchases, and the like.

The 3% tax applies to large digital companies, targeting revenue from online advertising, user data, and intermediation platforms. The tax, signed into law in July, applies retroactively to the start of the year.

The Organization for Economic Cooperation and Development is trying to find agreement on a global digital tax solution among more than 130 countries, but the process is moving too slowly for France.

“If the international community has been able to pave the way for decisions, we will never have adopted national taxation,” French Finance Minister Bruno Le Maire told Bloomberg Television July 18. “We decided to move on because the international community was not moving on.”

What Does the U.S. Want?

Most of the companies hit by the tax will likely be American, including Amazon.com Inc., Alphabet Inc.'s Google, and Facebook Inc. France has said roughly 30 companies will fall in the tax’s scope.

The measure could subject companies to double taxation because they probably won’t be able to get credits for it, as they usually do for foreign income taxes, said Cathy Schultz, vice president of tax policy at the National Foreign Trade Council. It’s unclear whether the French tax is eligible for foreign tax credits, because it’s a tax on revenue rather than profits.

The measure could also fall outside the standard dispute resolution mechanisms in income tax treaties because it’s a revenue tax, she said.

“If there are problems, the question is, how are they going to be resolved? Because it’s outside of the treaty, it puts us in a bind,” Schultz said.

The U.S. administration has warned France that it views the measure as discriminating against U.S. companies, and the USTR on July 10 opened an investigation under Section 301 of the Trade Act of 1974—the same process used to impose tariffs on China.

Besides stopping France, the U.S. is also anxious to deter a growing number of countries planning similar measures. The U.K., Austria, and other nations are weighing digital taxes of their own.

“If the French DST goes unchallenged, it will provide political cover for a dozen or so countries considering similar measures,” Gary Sprague, a partner at Baker & McKenzie LLP in Palo Alto, Calif., said in a statement to the USTR released Aug. 12. Sprague said he was speaking on behalf of a group including Airbnb Inc., Amazon, Expedia Inc., Facebook, Google, Microsoft Corp., Salesforce.com Inc., Stripe, and Twitter Inc.

What Could the U.S. Do?

The USTR is looking for public feedback on how the French tax discriminates against U.S. companies, burdens or restricts U.S. commerce, or violates France’s obligations under the World Trade Organization’s General Agreement on Trade in Services.

A Section 301 investigation is meant to act as leverage on the other country, said Grant Aldonas, executive director of Georgetown University’s Institute of International Economic Law.

“They’re trying to build a case on the basis of which they can then bring someone to the table and then negotiate a resolution,” said Aldonas, the principal managing director of Split Rock International Inc., a trade and investment consulting firm in Washington. “I’d expect they’re really trying to establish a record that allows them not only to trigger a 301, but also to make the case for what the problems are with the individual tax so they can frame a solution with the EU.”

Although the tax was imposed by France, the U.S. may pursue trade discussions about it with the European Union, because the EU conducts trade negotiations on behalf of member states.

If the trade investigation finds the tax to be discriminatory or unreasonable, the U.S. could impose retaliatory tariffs on France. President Donald Trump said July 26 that he was considering tariffs on French wine.

The U.S. could pursue dispute settlement at the WTO instead of, or in addition to trade retaliation. Numerous comment letters from industry groups, including from the U.S. Chamber of Commerce, the NFTC, and the Information Technology Industry Council, asked the USTR to turn to the WTO rather than tariffs.

The U.S. may have yet another tool available: A June 24 letter from Senate Finance Committee leaders asked the Treasury Department to consider tax code Section 891, a never-before-used measure that allows the U.S. to double the tax rate on any French company or citizen who pays taxes in the U.S.

https://news.bloombergtax.com/daily...nders-response-to-french-digital-services-tax

Trump says U.S. would tax French wine in response to digital tax
August 23, 2019​

WASHINGTON (Reuters) - U.S. President Donald Trump on Friday reiterated criticism of a French proposal to levy a tax aimed at big U.S. technology companies and threatened again to retaliate by taxing French wine.

Speaking to reporters at the White House before leaving for a Group of Seven summit in France, Trump said he is not a “big fan” of tech companies but “those are great American companies and frankly I don’t want France going out and taxing our companies.”

“And if they do that ... we’ll be taxing their wine like they’ve never seen before,” he said.

https://www.reuters.com/article/us-...wine-in-response-to-digital-tax-idUSKCN1VE05B

 

[Arkain2K]

Google, Amazon, Facebook slam French digital tax as ‘discriminatory’
20/08/2019

American tech giants Amazon, Facebook and Google joined forces on Monday to decry the French digital tax as retroactive and discriminatory.

President Donald Trump is considering retaliating against the tax -- approved July 11 -- with punitive tariffs on French wine imports, prompting an investigation by the Office of the US Trade Representative (USTR).

The so-called GAFA companies appeared at a USTR hearing on possible countermeasures and were unanimous in their complaints, calling the tax a "troubling precedent."

The tax, which Washington considers unfair, adds yet another bone of contention to the transatlantic trade disputes that now also include steel, aluminum, automobiles, aircraft and agriculture.

The proposed three percent tax on total annual revenues of companies that provide services to French consumers applies only to the largest tech companies, which are mostly US-based.

'Double taxation', says Amazon

For Amazon, where France represents the second largest European market for e-commerce, the levy "creates a double taxation," said Peter Hiltz, director of tax planning for the online retail giant.

Some 58 percent of Amazon's sales are through partner companies, which stand to take the hit.

The tax "negatively impacts Amazon and thousands of small and medium businesses," Hiltz said.

"Amazon cannot absorb the expenses," and the company "already informed partners that their fee will increase starting October 1," he added

Some internet heavyweights have taken advantage of low-tax jurisdictions in places like Ireland while paying next to nothing in other countries where they derive huge profits.

The United States has been pushing for an overarching agreement on taxation of digital commerce through the Group of 20 economic forum, but France pressed ahead on its own.

Imperfect solution?

It is "an imperfect solution to address an outdated tax system," said Jennifer McCloskey of the Information Technology Industry Council, which supports a multilateral agreement under the auspices of the Organization of Economic Cooperation and Development.

Hiltz agreed, saying the companies believe "an international agreement under the OECD is reachable."

The tax will apply to about 30 companies with at least $28 million (25 million euros) in sales in France and $831 million worldwide.

But it does not apply to other internet operators like media companies.

The tax touches "a handful of internet business when every sector is becoming digital," Google's Nicholas Bramble said at the hearing.

Taxing only this part of the industry "doesn't make sense."

The companies also complained that the tax is retroactive, since it will apply from the beginning of 2019 -- something they have "never seen" before, according to Alan Lee of Facebook.

https://www.france24.com/en/20190820-france-google-amazon-facebook-digital-tax-discriminatory

 

[Arkain2K]

France hits back at Trump’s ‘stupid’ wine tariff threat
‘We will try to negotiate’ with the US, says agriculture minister.
By Hans von der Burchard| 7/30/19

French Agriculture Minister Didier Guillaume​

U.S. President Donald Trump's threat to impose tariffs on French wine in retaliation for France's digital services tax is "absurd" and "absolutely stupid," the country's agriculture minister said Tuesday.

Didier Guillaume reacted to a tweet by Trump, who wrote Friday that he would "shortly" announce "a substantial reciprocal action" against the digital services tax, also known as the GAFA (Google, Apple, Facebook, Amazon) tax in French, which was adopted by the French senate earlier this month and signed into law by President Emmanuel Macron last week.

"It's absurd for a political and economic debate to say: You tax the 'GAFA,' we will tax your wine. It's completely stupid," Guillaume told French news channel BFMTV.

He added that the French digital services tax — which levies a 3 percent tax on domestic revenues of digital giants with at least €25 million of revenue in France and €750 million globally — is "completely different" from trade in wine, which is a foreign exchange of goods.

"In any case, we will try to negotiate [with the U.S.]," Guillaume said.

French Economy Minister Bruno Le Maire told reporters on Saturday that the EU and U.S. are facing the same "challenge" on how to tax digital revenues, and urged the U.S. administration "to work closely with us" to reach a consensus on a universal digital services tax at the G7 leaders' summit in Biarritz, France, in late August.

This "would pave the way" for an international consensus at the OECD by the end of 2020, which would lead to France withdrawing its national tax, Le Maire added.

https://www.politico.eu/article/france-hits-back-at-trumps-wine-tariff-threat-over-digital-tax/

 

[Arkain2K]

French wine-makers hope for G7 detente with Trump over tariffs
Trump has threatened high tariffs on French wine in response to Macron’s tech tax
Aug 23 2019

French wines on sale at a supermarket in LA. The US is France’s biggest export market in value terms, worth €1.7bn.​

French wine-makers are increasingly concerned about Donald Trump’s threats to introduce high tariffs on French wine in retaliation for Emmanuel Macron’s tax on global technology companies, as world leaders gather for the Biarritz G7 summit this weekend.

A new front in Trump’s international trade wars could open up across France’s vineyards, damaging the livelihoods and jobs of small producers, if the US president decides to substantially increase tariffs on French wine as punishment for what he has called the “foolishness” of the new levy on the annual revenues of technology companies.

Although alcohol has no connection to Macron’s drive to make companies including Google, Amazon, Facebook and Apple pay more and “fairer” tax, French wine is seen as a symbolic target by Trump. The US president sees the tech tax as attacking US companies and wants to retaliate, although France argues the tax is aimed at all tech firms, not just American ones.

Trump began tweeting furiously about French wine last November, while attacking Macron over nationalism and world wars. He said of France’s own tariffs on imported wine, which are set by the EU: “Not fair, must change!”

Last month he ramped up threats to hit French wine directly, tweeting that he would soon announce a “substantial reciprocal action” on what he called Macron’s “foolishness” over the technology tax. He added: “I’ve always said American wine is better than French wine!”



This month Bloomberg reported that Trump had floated the idea of going as far as putting a 100% tax on French wines at a business roundtable in the Hamptons.

Trump is a proud teetotaller, but he recently told reporters he had “always liked American wines better than French wines even though I don’t drink”. He explained why: “I just like the way they look.”

His tweets prompted the inevitable joke in France: “Make America grape again.”

France is a major wine-producing nation and the US is its biggest export market in value terms, accounting for 18% of French wine exports and worth €1.7bn (£1.5bn), up almost a third over the past five years. Wine is a crucial part of France’s identity and economy – its second-biggest export after aerospace in value terms.

American tariffs could prove hugely damaging to the many small French wine producers whose middle-market products sell for affordable prices in the US, particularly rosé wine, which is increasingly popular. Producers of the more expensive and exclusive “grands crus” vintage wines would likely be able to compensate elsewhere.

But small French producers, already concerned about difficulties in exporting to the UK after Brexit, are hoping the row can be contained at the G7 summit in Biarritz. They have seen how the high tariffs Trump put on Spanish olives hit farmers in Andalucía.

“We’re extremely concerned, it’s a worrying situation, you can’t deny it,” said Marcel Perinet, a small organic and natural wine-maker in south-eastern France who makes sparkling rosé and exports 40% to the US and Canada.

He previously worked in the restaurant business and said he remembered a row in 2003 when France did not support the US-led war in Iraq and some French wines were poured down drains in protest. “I lived through the impact of anti-French wine feeling in 2003 – it sorted itself out eventually but it was costly for a while,” he said.

Perinet said he had begun diversifying into different Asian markets to prepare and his US importer was already stocking up by ordering in more French wine in anticipation of a possible tariff rise. “So far this year I’ve exported more volume to the US because of people stocking up,” Perinet said. “But I’m worried.”

Thomas Montagne, the head of the European Confederation of Independent Winegrowers, is a producer in the Luberon, southern France. He said: “Clearly we’re concerned all across France. The US is our first market in terms of value, and the UK, which is our second, is also facing uncertainty over Brexit.”

He said people working in agriculture – including wine-makers – did not want to be “hostages” to politics any longer. Small producers account for 55% of the French wine harvest, and stood to lose the most, he said.

The French Federation of Wine and Spirit Exporters said it was “extremely vigilant” and urged the US and France to find a way to stop Trump’s threats being put into action.

Last month, the French agriculture minister called Trump’s rationale in hitting French wine “completely moronic”.

Macron stood by his technology tax this week, saying the current “crazy” system under which tech companies were able to book profits in low-tax countries, no matter where the revenue came from, gave them “permanent tax haven status”.

France’s levy of 3% on the total annual revenues of the largest tech companies providing services to French consumers is not specifically aimed at US companies, but the big four of Google, Apple, Facebook and Amazon are the highest profile.

https://www.theguardian.com/world/2...s-hope-for-g7-detente-with-trump-over-tariffs

 

[Arkain2K]

EU chief Tusk says will ‘respond in kind’ if US imposes tariffs on France over digital tax
Spriha Srivastava and Elizabeth Schulze | Aug 24 2019​

The European Union will “respond in kind” if the U.S. imposes tariffs on France over digital tax plan, Donald Tusk, president of the European Council said on Saturday.

Speaking at the G-7 leaders meet in Biarritz in France, Tusk said if President Donald Trump uses tariffs for political reasons then it can be risk for the whole world, including the EU, Reuters reported.

Earlier on Saturday, Trump criticized the French digital tax aimed at big U.S. technology companies and threatened again to retaliate by taxing French wine.

Speaking to reporters at the White House before leaving for a Group of Seven summit in France, Trump said he is not a “big fan” of tech companies but “those are great American companies and frankly I don’t want France going out and taxing our companies.”

“And if they do that ... we’ll be taxing their wine like they’ve never seen before,” he said according to Reuters.

France passed a 3% tax in July that targets roughly 30 big tech companies including Facebook, Amazon and Google. The levy applies to companies with more than 750 million euros ($830 million) in annual revenues from “digital activities,” including 25 million euros ($27 million) from within France.

France pushed forward with the tax after a broader EU-wide effort failed last year. Now other countries like the U.K., Italy and Austria are considering enacting their own versions of a digital tax. France’s government has said the measure will raise 500 million euros per year.

The U.S. Trade Representative launched an investigation into France’s digital tax, saying it “unfairly targets American companies.” President Donald Trump has threatened to impose tariffs on French wine in response to the measure.

Big U.S. tech companies have strongly opposed France’s digital tax, saying they would prefer a multilateral agreement. Amazon has also said it will pass some of the costs of the new measure down to thousands of small and medium-sized French businesses selling on its platform. The Organization for Economic Cooperation and Development (OECD) is currently reviewing digital taxation but has said it won’t reach a conclusion until next year.

https://www.cnbc.com/2019/08/24/don...poses-tariffs-on-france-over-digital-tax.html

 

[7437]

Oh no, they will be forced to pay any taxes at all? How unfair.

 

[JohnnySagebrush]

If you make money in a country, you should pry pay taxes in said country...

 

[Anung Un Rama]

Glad to see Trump so aggressive with our enemies France and Denmark. Why can't they just get along with like the USA and DPRK?

 

[Arkain2K]

If you make money in a country, you should pry pay taxes in said country...

I can see the old EU tax regime to crumble very soon and replaced by what's coming out of the OECD negotiation.

Current E.U tax havens where global firms loves to set up shop like Ireland, the Netherlands, and Luxembourg better be prepared, for they are going to lose their cash cows.

As for countries like France who believe they have the sovereign right to create new tax specifically targeting a group of U.S companies, so too is the sovereign right of the government where those companies came from to the return the favor.

 

[HockeyBjj]

Damnit now I have to side with France

Sales in a country should have to pay that country's taxes. Not find the one with the lowest taxes around to claim headquarters in and then operate under a lower bracket in affiliated countries.

I also have a problem with shipping companies registering their fleets in countries like Panama when most of their trips involve completely unrelated countries to where they're registered.

 

[toutadixballes]

As for countries like France who believe they have the sovereign right to create new tax specifically targeting a group of U.S companies, so too is the sovereign right of the government where those companies came from to the return the favor.

They just want them to pay taxes like all the other companies, they not targeting them precisely.
A poor guy who a has a bakery, pays more taxes today than google, Amazon or uber, how is that fair ?
If you're operating in the french market, you have to follow the laws of this market.

 

[ocfightfan]

I'm hoping for a double knock out.

 

[Arkain2K]

They just want them to pay taxes like all the other companies, they not targeting them precisely.

Yes, and it's mere coincident that the new tax is named "GAFA".

We can simultaneously acknowledging the basic fact that big U.S tech companies (such as Google, Amazon, Facebook, and Apple) have been taking full advantage of Ireland's low 12.5% corporate tax rate and set up shop there to collect their European revenues as per E.U laws, AND the fact that France tailor-made this new tax specifically to get a piece of that pie.

A poor guy who a has a bakery, pays more taxes today than google, Amazon or uber, how is that fair ?

Can you actually name this specific bakery that is paying more than the $4.2 Billions in taxes that Google paid last year?

In Europe, Google paid Ireland €171m in taxes last year on profits of €1.16 billion, giving the company an effective tax rate here of 14.69%.

https://www.rte.ie/news/business/2018/1123/1012900-google-ireland-paid-171m-in-tax-last-year/

If you're operating in the french market, you have to follow the laws of this market.

They are operating in the E.U single market and paid taxes according to the laws of that single market. That means they are paying taxes on their European earnings to Ireland if they are headquartered in Ireland.

If France unilaterally stacked another French tax on top of that without any agreement with Ireland, it is essentially double-taxation.

If the E.U doesn't like the way some of their members offer lower corporate tax rates than average to lure multinational companies to set up shops there, they are free to change their tax laws to book it at the country where the sales is made instead of where the E.U headquarter is (as many people in this thread have said), or take the companies to court if they think any E.U tax laws are being broken, as it is the case with Apple.

If the E.U don't overhaul their tax laws, then every E.U country will just ends up unilaterally creating their own tax provisions targeting any market segment as they see fit, not just the French.

 

[toutadixballes]

Yes, and it's mere coincident that the new tax is named "GAFA".

We can simultaneously acknowledging the basic fact that big U.S tech companies like Google, Amazon, Facebook, and Apple have been taking full advantage of Ireland's low corporate tax rates and set up shop there to collect their European revenues as per E.U laws, AND the fact that France tailor-made this new tax specifically to get a piece of that pie.



Can you actually name this specific French bakery that is paying more than the $4.2 Billions in taxes that Google paid last year?



They are operating in the E.U single market and paid taxes according to the laws of that single market. That means they are paying taxes on their European earnings to Ireland if they are headquartered in Ireland.

If France unilaterally stacked another French tax on top of that without any agreement with Ireland, it is essentially double-taxation.

If the E.U doesn't like the way some of their members offer lower corporate tax rates than average to lure companies to set up shops there, they are free to change their tax laws, or take the companies to court if they think laws are being broken, as it is the case with Apple.

If the E.U don't overhaul their tax laws, then every E.U country will ends up unilaterally creating their own tax provisions targeting any market segment as they see fit, not just the French.

Lol man so much bs.

Only these companies are not paying taxes, that's why it's called like this. They don't target them specifically, they just want all companies to pay taxes, period.

PaY mORe thAN 4,2 BiLliOnS

You know how taxes work right ?
It's a percentage of what you earn, can you actually name this specific bakery that earned more than 136 billions dollars last year ?
I can't believe you used this argument


It's not a double taxation, Google and the others are fooling the system, it's too easy.

 

[robotsonic]

99% of people in the US would actually be for these guys getting taxed more wherever they are operating. They have got away with gaming the system for way too long, it's absurd how they are allowed to operate.

 

[7437]

99% of people in the US would actually be for these guys getting taxed more wherever they are operating. They have got away with gaming the system for way too long, it's absurd how they are allowed to operate.

this thread implies that it is a much, much lower number of people who are against this.