It was on Thursday 11 July, that France made the final step in the adoption of its national tax on digital giants such as Amazon or Instagram (see EUROPE 12290/19), after a final vote in the French Senate and under a tense atmosphere with the United States.
"France is a sovereign state, it decides sovereignly on its tax provisions and will continue to decide sovereignly on its tax decisions", French Finance Minister Bruno Le Maire told senators in response to the announcement the day before that the United States opened an inquiry to determine whether the French tax is discriminatory and whether it restricts American commerce.
"This is the first time in the history of relations between the United States and France that the American administration has decided to open a section 301 investigation. And I strongly believe that among allies, we can, and must, resolve our differences by means other than threats", he added.
The tax, which will be three percent of the revenue generated by targeted online advertising, the sale of data for advertising purposes and the linking of Internet users through platforms whose digital activities generate more than 750 million euros worldwide, is seen across the Atlantic as "unfairly targeting American companies".
According to Bruno Le Maire, the French tax, which is intended to be abolished once an international agreement on the taxation of digital giants has been reached (see EUROPE 12250/13), should on the contrary be an "incentive" for the United States to advance its work at the OECD. The French Minister also hopes that discussions can progress during the ‘G7 Finances’, which will take place on 17 and 18 July in Chantilly.
In a statement, the office of the US Trade Representative, Robert Lighthizer, further promises that the United States will seek to identify a solution at the OECD. For now, however, differences remain wide.
The United States is in favour of an approach that does not apply solely to a subset of companies with a strong digital dimension and would prefer it to be more wide-ranging, in order to address the more significant consequences of the digital transformation of the economy (see EUROPE 12262/14). France is not fundamentally opposed to this, but stands firm on the fact that the digital economy, which generates profits from the use of data, must be specifically taxed.
When asked about a possible EU reaction if the United States were to impose tariff reprisals on France because of this tax, the European Commission was very cautious and refused any comments. (Original version in French by Marion Fontana with Hermine Donceel)