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 euros 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.
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France orders tech giants to pay digital tax
France’s finance ministry has sent out notices to big tech companies liable for its digital service tax to pay the levy as planned in December, the ministry said on Wednesday.
France suspended collection of the tax, which will hit companies like Facebook and Amazon, early this year while negotiations were underway at the Organisation for Economic Cooperation and Development (OECD) on an overhaul of international tax rules.
France to levy tax on digital giants before Biden administration takes office
France confirmed on Wednesday it will levy its tax on digital giants for 2020, following a warning by Economy Minister Bruno Le Maire in October that it would do so. With this decision, however, it risks US countermeasures at a time when it is scrambling for public money amid a devastating pandemic.