Washington — At the conclusion of the G7 Leaders Summit taking place over this weekend in Biarritz, France, the G7 leaders committed to reaching an agreement in 2020 to “modernize international taxation within the framework of the OECD.” President Macron also indicated France and the US were close to a “compromise” regarding the French digital services tax. Today, the Computer & Communications Industry Association expressed concerns about the US possibly giving France a pass on its trade obligations.
CCIA has long encouraged countries to pursue ambitious, global tax reform rather than enacting discriminatory, national digital taxes. Ahead of the G7 Summit, CCIA joined 14 other industry associations in releasing recommendations and encouraged the G7 to seek strong commitments to achieving a multilateral approach to tax policy. CCIA also testified and submitted comments last week regarding USTR’s Section 301 investigation of the French digital services tax encouraging a strong response from U.S. policymakers.
The following can be attributed to CCIA President & CEO Ed Black:
“It is positive that G7 Leaders reiterated their support to achieve global tax reform by next year.”
“France’s unilateral digital tax action aimed at leading American companies is unjustified, and if tolerated, will encourage other countries to follow their example. While we have many questions and await more details, it currently appears that this ‘agreement’ would be more capitulation than compromise.
“It is hard to imagine that the US would take no action against France’s digital tax targeting US companies. It is unclear how US companies would benefit from permitting France to flout its trade obligations. CCIA encourages national leaders to fight trade barriers and to work toward comprehensive global tax reform through the OECD.
“We should not support a compromise that would green-light discriminatory taxes against US tech companies for some vague promise of possible partial reimbursement years later. The USTR and others heard clearly at a hearing last week from us and many others that the French digital tax is a trade barrier. It would be disappointing if US officials gave France a pass for now in meeting its trade obligations.”
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