France sticks to digital tax despite US anger

PARIS: Finance Minister Bruno Le Maire said on Friday that France would stick to plans for a tax on digital giants such as Facebook and Apple, despite displeasure in Washington.

“We are determined to implement a tax on the largest digital companies to bring more justice and efficiency to the international tax system,” Le Maire said as he arrived in Bucharest for talks with his eurozone counterparts.

France last month unveiled draft legislation to set a three percent tax on digital advertising, the sale of personal data and other revenue for any technology company that earns more than 750 million euros ($841 million) worldwide each year.

The effort comes amid rising public outrage at the minimal tax paid by some of the world’s richest firms which base operations in jurisdictions that charge low rates.

France drafted the law after a European Union-wide effort it championed was scuttled by low-tax countries such as Ireland, which have wooed big technology firms.

Other countries are considering following France’s lead including Britain, Spain, Austria and Italy.

Le Maire spoke just hours after US Secretary of State Mike Pompeo raised his objections to the tax as he met French Foreign Minister Jean-Yves Le Drian in Washington.

Pompeo said the tax would negatively impact US companies “and the French citizens who use them,” according to the State Department.

France’s Le Maire insisted that Paris would work closely with the US to draw up a global tax reform at the OECD, the organisation of developed countries.

This was the “better solution”, Le Maire said, adding that he would hold talks with his US counterpart Steven Mnuchin next month to accelerate this process.