Big Tech, Trump protest French tax
The relationship between President Donald Trump and the largest U.S. technology companies has often been frosty but a common opponent — France’s plan to tax U.S. tech giants — will bring the two sides together, at least temporarily.
Alphabet’s Google, Facebook and Amazon.com all testified in Washington on Monday in support of the Trump administration’s efforts to potentially punish France for enacting a 3 percent tax on global tech companies with at least 750 million euros ($832 million) in global revenue and digital sales of 25 million euros in France.
France’s digital tax “is a sharp departure from long-established tax rules and uniquely targets a subset of businesses,” Nicholas Bramble, trade policy counsel at Google, said at the U.S. Trade Representative’s Office hearing in Washington on Monday. “French government officials have emphasized repeatedly that the” tax is intended to target foreign technology companies.
The U.S. is probing France’s new tax, which French President Emmanuel Macron signed into law last month, using a tool that could be a precursor to new tariffs or other trade restrictions. U.S. Trade Representative Robert Lighthizer could take action as soon as Aug. 26 when a comment period on the issue closes.
The effort to crack down on France has created common ground for Trump — who has called Google and Facebook “on the side of the Radical Left Democrats” and accused Amazon of avoiding taxes — and technology companies that are both worried foreign governments are looking to use American corporations as a way to collect additional tax revenue.
The U.S. is looking to use France as an example to deter other countries from targeting American technology firms for tax dollars. The U.K., New Zealand, Spain and Italy are among countries considering their own digital taxes, a move that U.S. officials say could lead to companies being taxed multiple times on the same profits.
Trump has threatened to tax French wine or other goods in response to the digital tax.
The U.S. says countries considering their own version of a digital tax should focus on ongoing global talks with 130 countries on how to tax tech companies. Any future pact would likely create a whole new set of rules governing which countries have the right to tax the companies, which corporate profits are taxable, and how to resolve the inevitable disputes that would arise. A deal could be reached as soon as next year.