France demands tech giants to pay up

The French ministry of economy and finance has warned tech companies that it expects them to pay the nation’s new 3% digital service tax starting in December.

France had halted collection of the tax earlier this year after backlash from the US government and threats of increased trade tariffs by the Trump administration.

Facebook and Amazon among companies issued with requests that could trigger retaliatory tariffs.

French authorities have been demanding millions of euros from US technology groups as they push ahead with a new digital service tax that has enraged Washington.

Facebook and Amazon are along with the companies that have received communication from French authorities in recent days demanding payment of the tax for 2020, according to the French officials, company executives and advisers.

This collection of tax has been called as an example of unfair trade practice because it largely affects US companies, threatens to reignite the transatlantic trade tensions, and trigger new tariffs on Europe weeks ahead of the inauguration of Joe Biden.

For the past couple of years, France’s economy minister Bruno Le Maire has been pushing hard for a tax reform. Many economy ministers in Europe agree that tech companies are not taxed appropriately.

France said it wants an EU proposal in early 2021 for taxation of digital services across Europe in case the OECD talks continue to make no progress. But its preferred option remains an international solution through organization.

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