France will require big tech companies to pay digital services tax
According to Reuters, The French Ministry of Finance has sent a notice to big technology companies responsible for paying the digital services tax to pay the fee, as planned in December, the ministry said on Wednesday.
The 3% tax on revenue from digital services earned in France by companies with revenues of more than 25 million euros there and 750 million euros worldwide was introduced last year. Earlier this year, France suspended tax collection, which will hit companies such as Facebook and Amazon, while the Organization for Economic Co-operation and Development (OECD) continued talks on revising international tax rules.
The Ministry of Finance has long stated that it will collect the tax in December, as planned if the talks fail by then, and this happened when almost 140 member states agreed to continue negotiations until mid-2021. Finally, negotiations have stalled because the Trump administration did not want to sign a multilateral agreement.
His administration, which withdrew from talks with the OECD in June, has vowed revenge if France moves forward with the tax, and it can reject appropriate tariffs on $1.3 billion worth of French goods, including bags and cosmetics, as soon as January 6, CNN Business reports.
French Finance Minister Bruno Le Mayr said earlier this week that he hoped to persuade Biden to join the OECD process again to reach an agreement.
According to Yahoo!finance, Facebook’s position “is to ensure compliance with all tax laws in the jurisdictions where we operate.” Amazon has received a reminder from the French authorities to pay the tax and will comply with it, according to a person familiar with the matter in the online store.
Paris has said it will lift the tax as soon as an OECD agreement is reached to update the rules on cross-border taxation for the age of e-commerce, where large Internet companies can reserve profits in low-tax countries, no matter where their customers are.