Published: Fri, January 24, 2020
Global News | By Blake Casey

France agrees to delay new tax on tech giants

France agrees to delay new tax on tech giants

The dispute began previous year when Paris approved a levy of up to three percent on revenues earned by technology companies in France, as worldwide efforts dragged on to find a new model for taxing revenues earned via online sales and advertising.

The apparent détente emerged after Macron and President Donald Trump agreed in a phone call late Sunday to grant more time for negotiations over a global solution to taxing Amazon, Facebook and other digital companies. "We'll be having similar conversations with them", he told the WSJ.

The French government will now delay the collection of payments on the tax until December. "If there is a credible solution at the OECD, there is no need for a national one, he said".

Without explicitly naming it, Mr Le Maire also appeared to make a jibe at Ireland, claiming it was profiting from applying a low rate of tax to tech companies operating elsewhere in Europe.

France's objectives in the talks remained to reach a "fair taxation of digital companies and minimum taxation at global level", Le Maire added.

Nevertheless, according to concurring sources, France is willing to suspend the tax "to provide some time" to find a solution under the auspices of the Organisation for Economic Co-operation and Development. For its part, the OECD's Secretary General Angel Gurria told CNBC this week that he believed a solution could be found by the end of the year.

French Finance Minister Bruno Le Maire told reporters at the World Economic Forum on Wednesday that his country had accepted a postponement of the payments to the end of 2020, but the battle was not yet over.

Le Maire declined, however, to say whether France would suspend its digital tax.

Samsung Galaxy Z Flip may cost around $1400
Samsung Galaxy A01 is not available for purchase anywhere in the world yet, so we don't have any details about its price. The source also claims that the pricing will start at €900 in France, that will be the price for the Galaxy S20 unit.

"Everything is on the table", Mr Le Maire said. "So, there's still some work to be done". Digital taxes could raise millions of pounds and euros for European countries.

In December, the Trump administration last month threatened to impose 100% tariffs on $2.4bn worth of French goods, including champagne and handbags, arguing that the 3% tax on the revenues of large digital services companies unfairly targets U.S. firms.

"We welcome the reported French suspension of their digital tax & the renewed focus on achieving global tax reform", CCIA Europe wrote in a tweet.

Macron tweeted Monday that he had had a "great discussion" with Trump on the issue.

"We have no Plan B - we just have to get it done", he said.

Macron's decision averts a trade war with the USA after Trump threatened tariffs against French products including wine.

He added that the European Union has "no choice" but to negotiate a new trade deal with the US and that if there was no deal, he would need to "take action" in the form of "very high tariffs on their cars and other things". Falling vehicle sales and challenges toward greener technologies have already deepened the woes of the auto sector.

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