The US will investigate whether France’s digital services tax, expected to pass the French Senate tomorrow, unfairly targets US companies, US Trade Representative Robert E. Lighthizer today announced.
Lighthizer said his office has launched a probe into the French tax under Section 301 of the Trade Act of 1974. The law gives the President broad powers to investigate and respond to a foreign country’s unfair trade practices and take appropriate action, including retaliating if needed.
“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.
France’s digital services tax would impose a 3% tax on annual revenues of certain large digital companies.
The US is looking into whether the French law, by only imposing tax on large companies and by limiting the types of services subject to tax, targets US companies while excluding French ones.
National Foreign Trade Council (NFTC) Vice President for Global Trade and Innovation Jake Colvin applauded the announcement, saying that France’s digital services tax amounts to a discriminatory tariff on American technology companies and threatens transatlantic trade ties.
“In light of today’s announcement, we urge the French Government to reconsider its unilateral tax and focus instead on achieving a multilateral consensus to reform global tax rules for the digital age that is underway at the Organization for Economic Cooperation and Development (OECD),” Colvin said.
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