Brussels, BELGIUM — French President Emmanuel Macron has signed the country’s new digital services tax into law. The official text was published today.
The French Senate and industry has voiced concerns that the tax might conflict with French law and EU state aid rules. The French government did not send the law to the French constitutional court, despite the request of the Senate, nor did it ask the European Commission to assess whether it constitutes illegal state aid.
The United States Trade Representative, moreover, has launched a trade investigation into the law.
The digital services tax will require major tech companies to pay a 3% tax on their turnover in France applied retroactively from the start of the year. The reasoning for the tax is the perception that digital companies pay less tax than traditional firms, a claim that several studies have debunked.
In the meantime, global consensus on tax reform is developing. The Organisation for Economic Co-operation and Development (OECD) aims to reach “a consensus-based long-term solution by the end of 2020”. This aim was reconfirmed by G7 Finance Ministers last week. Here is CCIA’s filing in response to the OECD consultation on the tax challenges of digitalization.
The Computer & Communications Industry Association supports ambitious global tax reform that doesn’t single out specific sectors.
The following can be attributed to CCIA Vice President and Head of office Christian Borggreen:
“France’s discriminatory tax risks derailing global tax reform and provoking trade retaliation against French exporters. France should instead lead efforts to achieve a more ambitious global tax reform that covers all industry sectors.”
“France’s digital tax tells startups and investors to take their innovation and successful businesses elsewhere.”
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