France is resuming collection of a special tax on Big Tech companies like Amazon and Facebook despite the threat of U.S. retaliatory tariffs on French Champagne, cheese, handbags and other goods.
The tax brought about €400 million to the French budget last year, but the government agreed to suspend it in 2020, in exchange for an American promise to drop the tariff threat pending talks on an international deal on taxing online companies.
France was hoping that such an accord could be reached by the end of this year, rendering the French tax moot. But the Trump administration pulled out of the negotiations, led by the Organisation for Economic Cooperation and Development (OECD), and no such deal is ready yet.
So French Finance Minister Bruno Le Maire said Thursday that France will again levy the tax. Speaking on a visit to Italy, he said: "We naturally hope that the Italian presidency of the G20 will provide the impetus to reach an agreement within the OECD, which could be supported by all European countries, concerning a fair tax on tech giants.”
A Finance Ministry official said the French Treasury sent the 2020 tax bills to Amazon, Google and other companies affected by the measure last week, and they have to pay by the end of the year. The ministry expects the tax revenue to total a bit more than last year because big tech companies have had a good year amid the pandemic.
France's trade minister told The Associated Press earlier this month that he hopes President-elect Joe Biden's administration rejoins discussions at the OECD for a global deal.
Other European countries have imposed similar measures, which are aimed at forcing online giants to pay full taxes in the countries where they do business instead of in tax havens. U.S. officials have argued that the taxes unfairly target successful American companies, though France says its tax is aimed at all big tech companies that make money online.