Gafa Tax: Washington Threatens To Overcharge French Products Up To 100%

The logos of the American digital giants, Google, Apple, Facebook and Amazon targeted by the French tax, called “Gafa”

Washington threatened Monday to impose additional duties, up to 100%, on the equivalent of $ 2.4 billion of French products in response to the introduction in France of a tax on giants American digital.

Among the products that could be surcharged are many cheeses including Roquefort, yogurt, sparkling wine and cosmetics such as soap and makeup or handbags.

The Trump administration therefore seems to be sparing the traditional wine, one of the most iconic tricolor export products, already already under US retaliation in another commercial dispute over European subsidies to Airbus.

This announcement follows an investigation opened last July by the US Trade Representative (USTR) concluding that the French legislation called “Gafa” (Google, Apple, Facebook and Amazon) is damaging to US companies.

“The USTR is committed to fighting the growing protectionism of the European Union member states, which unfairly target US companies,” the representative said in a statement on Monday.

The USTR proposal, which is yet to receive the approval of US President Donald Trump, risks intensifying friction with the European Union and France in particular.

Monday, well before the announcement of this threat of retaliation, the French Minister of the economy Bruno Le Maire warned that France would never give up its tax on the giants of the tech, and reproached the United States of no longer wanting a big international agreement on digital taxation.

These new threats are also unveiled the day before a meeting between Donald Trump and French President Emmanuel Macron.

The bilateral meeting, to be held Tuesday at 14:00 GMT in London as part of the NATO summit, will be scrutinized with special attention.

The French president has indeed thrown a pavement in the pool in early November, saying that the Alliance was in a state of “brain death”, lamenting the lack of coordination between the United States and Europe in the face of the offensive of the Turkey in northeastern Syria.

– “Discriminating” taxes –

“The USTR report sends a clear signal to France, and warns other countries that are finalizing similar measures that discriminatory taxes will not be tolerated,” responded Matt Schruers, executive director of the federation. the computer and communications industry (CCIA), in a statement.

He was referring to the fact that the Trump administration is also planning to open an investigation against Austria, Italy and Turkey to determine whether their taxes are threatening US companies.

The imposition of punitive tariffs on French products can not, it, not intervene before mid-January, after a period of consultations to examine the possible requests for exemptions, according to the calendar unveiled by the USTR.

The French tax Gafa imposes the digital giants to 3% of turnover in France, especially on targeted advertising online, the sale of data for advertising purposes and the linking of users by the platforms.

This solution is intended to be only temporary pending the outcome of international negotiations.

The G20 Finance Ministers, meeting in Washington in October, paved the way for crucial OECD negotiations on this issue, with the goal of reaching a global agreement by June.

– Major issue –

The taxation of digital giants and multinationals is a major challenge to adapt global taxation to the digitization of the economy of recent decades, so that states can collect taxes even if the groups are not physically present on their territory .

This summer, after the final adoption of the tax in France, Donald Trump had himself stepped up to the plate on this issue, denouncing “the stupidity” of President Emmanuel Macron and threatening to retaliate French wine.

Paris, however, has committed to abandon its tax, which comes into force this year, as soon as an international solution has been found under the auspices of the OECD.

“After calling for an international solution to the OECD, (Washington) is not sure of wanting,” lamented Monday Bruno Mayor.

For his part, Frenchman Thierry Breton, the new European Commissioner for the Single Market and Digital, has gone further and suggested that US Treasury Secretary Steven Mnuchin could announce the withdrawal of the United States from the negotiations of the United States. OECD.

“The (US) administration needs to work within this framework (from the OECD) to find an agreement on changes in business legislation that could restore multilateral support without adding complexity or subjecting companies to double taxation” responded Joe Kennedy from the Foundation for Technology and Innovation.


Leave a Reply

You may also like