The French authorities have taken another step to make US tech companies pay more tax. Facebook and Amazon, among others, have received an attack over the year 2020.
France states that American companies pay too little tax on money they earn in France. They do this by establishing themselves for tax purposes in countries such as Ireland, where they do not have to pay much. It concerns millions of euros, reports the Financial Times.
The French move may lead to American countermeasures. French products such as handbags and make-up are likely to be subject to an import tariff of 25 percent. The American consumer then has to pay more for it, which makes the products less attractive.
Earlier, the Americans threatened to tax French cheeses and champagne with an import tariff of 100 percent. The Trump administration called the French plans an example of unfair trade, because American companies in particular would be affected by the measure.
Tax Truce
Now that the French are pushing ahead with their plan, the fiscal truce with Washington is coming to an end, according to the Financial Times. In January, the countries agreed to resolve the disagreement through talks, overseen by the OECD, the Organization for Economic Co-operation and Development. But in June, talks were suspended by the US, with no prospect of a solution.
The US tax authorities previously stated that the countries are heading for a trade war if no deal is reached. The matter is not expected to be resolved until Joe Biden moves into the White House on January 20. Under Trump, relations with the countries of Europe have deteriorated. Biden wants to strengthen ties again.
France still hopes that a breakthrough will be achieved in consultation with the OECD. But according to a French spokesman, waiting longer is not an option. “The tech companies are the big winners of the corona pandemic. Their revenues are rising and they are paying too little tax. That was already the case before the pandemic.”