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| France hits back at US over tax on digital giants | |
| (about 2 hours later) | |
| France has hit back against US plans to investigate a planned tax on big digital companies, saying it was free to decide how it applies taxes as a sovereign country. | France has hit back against US plans to investigate a planned tax on big digital companies, saying it was free to decide how it applies taxes as a sovereign country. |
| On Wednesday, Donald Trump ordered an investigation into the French tax, an inquiry that could lead to the US imposing tariffs or other trade restrictions. | |
| The move opens a new trade dispute with a European ally and comes as the French Senate prepares for a final vote on the tax on Thursday. | |
| “For us, [the tax] is totally compliant with international agreements. Countries are sovereign on tax matters. So for us it is inappropriate to use a trade instrument to attack a sovereign state,” a finance ministry source said. | “For us, [the tax] is totally compliant with international agreements. Countries are sovereign on tax matters. So for us it is inappropriate to use a trade instrument to attack a sovereign state,” a finance ministry source said. |
| France pushed ahead with the tax after EU countries failed to agree a levy across the bloc in the face of opposition from Ireland and some Nordic countries. | France pushed ahead with the tax after EU countries failed to agree a levy across the bloc in the face of opposition from Ireland and some Nordic countries. |
| That prompted countries including France, Austria, Britain, Spain and Italy to announce plans for their own tax at the national level. | That prompted countries including France, Austria, Britain, Spain and Italy to announce plans for their own tax at the national level. |
| The UK chancellor, Philip Hammond, promised to introduce a digital sales tax in his budget last year to ensure that “global giants with profitable businesses in the UK pay their fair share”. | The UK chancellor, Philip Hammond, promised to introduce a digital sales tax in his budget last year to ensure that “global giants with profitable businesses in the UK pay their fair share”. |
| He said the UK could no longer wait for “painfully slow” discussions at international level and would instead introduce a 2% tax on certain types of sales, which he said would raise £400m a year. | He said the UK could no longer wait for “painfully slow” discussions at international level and would instead introduce a 2% tax on certain types of sales, which he said would raise £400m a year. |
| France says the tax is needed because big internet companies such as Facebook and Amazon are able to book profits in low-tax countries no matter where the revenue originates from. | France says the tax is needed because big internet companies such as Facebook and Amazon are able to book profits in low-tax countries no matter where the revenue originates from. |
| Paris has pledged to drop its tax as soon as an international agreement is reached at the Organisation for Economic Co-operation and Development overhauling decades-old cross-border tax rules for the digital era. | Paris has pledged to drop its tax as soon as an international agreement is reached at the Organisation for Economic Co-operation and Development overhauling decades-old cross-border tax rules for the digital era. |
| The French government says the tax does not specifically target US companies and will affect European and Asian firms as well. The tax will apply a 3% levy on revenue from digital services earned in France by firms with more than €25m (£22.5m) in French revenue and €750m worldwide. | The French government says the tax does not specifically target US companies and will affect European and Asian firms as well. The tax will apply a 3% levy on revenue from digital services earned in France by firms with more than €25m (£22.5m) in French revenue and €750m worldwide. |
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| E-commerce | E-commerce |
| US foreign policy | US foreign policy |
| Donald Trump | Donald Trump |
| Europe | Europe |
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| Amazon | Amazon |
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