French fury at US attempt to delay tax on digital giants

French Finance Minister Bruno Le Maire on Thursday condemned as a "provocation" a call by the United States for a break in negotiations on how to tax digital giants internationally.

French fury at US attempt to delay tax on digital giants
Photo: AFP

“I confirm that we have received, along with my counterparts in Italy, Spain and Britain, a letter from US Treasury Secretary Steven Mnuchin confirming that they don't want to pursue OECD talks on the digital tax,” Le Maire told France Inter radio.

“This letter is a provocation,” the minister said.

France, Britain, Italy and Spain had already sent a reply to Washington, expressing their desire to agree on “a fair digital tax at the level of the OECD as quickly as possible,” Le Maire continued.

“We were a few centimetres away from an agreement on a tax for digital giants, who are perhaps the only people in the world to have benefitted immensely from the coronavirus,” the minister said.

France decided to impose a tax on large digital companies of up to three percent of turnover as of January 1st, 2019, pending the adoption of international taxation. 

But it agreed to delay collection of the tax until a deal could be reached under the aegis of the Paris-based Organisation for Economic Co-operation and Development.

In those talks, 137 countries agreed in January to reach a deal on the taxation of multinationals by the end of 2020.

Taxation must take into account the actual activity carried out in each country, to prevent large groups such as Google, Amazon or Facebook from paying their taxes where the tax on profits is lightest.   

In retaliation for France's move, Washington threatened to impose tariffs of “up to 100 percent” on the equivalent of $2.4 billion of French goods.

Le Maire expressed indignation at such threats.

“Is this a way to treat US allies… to systematically threaten us with sanctions?” he asked, insisting Paris would not go back on its decision.

“Whatever happens, we will apply the tax on digital giants in 2020, as it's a question of justice,” Le Maire said.

France had not withdrawn the levy “but simply suspended it for a few months”.

Le Maire stressed that “either the US go back on their position and a deal is reached by the end of 2020 so that an international tax can be levied… or there is no OECD deal because the US is the only country blocking it.

“And in that case, we will levy our own national tax.”

Member comments

  1. We learn as children that the only way to stop a bully is to fight back. Trump’s father was a crook who bullied his own son. So Trump grew up a bully and now his quisling treasury secretary Mnuchin tries to bully France to do Trump’s bidding. Minister Le Maire has given Trump and his quisling well-deserved black eyes. Bravo!

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After the seismic decision of the US Supreme Court on Friday, French MPs are calling for the right to abortion in France to be protected by the constitution.

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Lawmakers from French President Emmanuel Macron’s Renaissance party are to propose a parliamentary bill on Saturday that would enshrine the right to abortion in the constitution. 

The move comes after the US Supreme Court overturned the landmark 1973 “Roe v. Wade” decision on Friday.

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Another co-sponsor, Marie-Pierre Rixain tweeted: “What happens in elsewhere cannot happen in France. We must protect the right to abortion for future generations. 

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In a Saturday interview with France Inter, Bergé suggested that the success of Marine Le Pen’s Rassemblement National during parliamentary elections earlier this month had created a sense of newfound urgency. 

She described the far-right MPs as “fierce opponents of women’s access to abortion” and said it was important “to take no risk” in securing it. 

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French Prime Minister Elisabeth Borne has come out in support of the bill. 

The left-wing opposition block, NUPES, also backs it and had planned to propose an identical piece legislation of its own on Monday. 

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Changing the constitution requires the National Assembly and Senate to adopt the same text, then a three-fifths majority of parliament sitting in congress. The other option is a referendum.