Tech giants will pay more taxes in spite of United States examination

A day after the Trump administration revealed strategies to examine whether France’s prepared digital tax total up to unreasonable trade practices by victimizing United States business, the French federal government has actually passed the laws. On July 11, the Senate passed the costs producing a 3% tax on huge tech business supplying services to French users. It might impact United States giants Apple, Facebook, Amazon and Google.

The United States examination into France’s brand-new guidelines, revealed July 10, will be carried out by United States Trade Representative Robert Lighthizer. It will be a 301 probe, the exact same kind that resulted in tariffs being put on China in 2015.

“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” Lighthizer stated in a declaration Wednesday. “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”

A trade group that represents Microsoft, Google, Facebook and Amazon called the United States examination “an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe.”

The United States will be holding its very first hearing on the examination on Aug. 19, Reuters reported Friday.

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The new French law affects companies that make at least €750 million in revenue worldwide — around $844 million — as well as €25 million in digital sales in France. Over the past decade, the French government and the European Union have been investigating the back taxes of Apple, Google, Amazon and Facebook to determine whether they’re paying enough.

Bruno Le Maire, the French finance minister who introduced the new legislation, had previously threatened to start taxing big tech companies at a national level if the EU couldn’t agree on a joint tax initiative for digital revenues.

At the end of last year, Apple reportedly agreed to pay France nearly $600 million in back taxes.

Originally published July 11, 12:29 p.m. PT.  
Update, July 12: Adds info on first hearing.