Google, FB unite with Trump to protest French tech tax

Bloomberg August 19 | Updated on August 19, 2019 Published on August 19, 2019

The relationship between President Donald Trump and the largest US technology companies has often been frosty but a common opponent — France’s plan to tax US tech giants — will bring the two sides together, at least temporarily.

Alphabet Inc’s Google, Facebook Inc and Inc are all scheduled to testify in Washington on Monday in support of the Trump administration’s efforts to potentially punish France for enacting a 3 per cent tax on global tech companies with at least €750 million ($832 million) in global revenue and digital sales of €25 million in France.

France’s digital tax is a sharp departure from long-established tax rules and uniquely targets a subset of businesses, according to prepared remarks a Google representative is scheduled to deliver in the US Trade Representatives Office hearing in Washington. French government officials have emphasised repeatedly that the tax is intended to target foreign technology companies.

The US 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. US Trade Representative Robert Lighthizer could take action as soon as August 26 when a comment period on the issue closes.

The US is looking to use France as an example to deter other countries from targeting American technology firms for tax dollars. The UK, New Zealand, Spain and Italy are among countries considering their own digital taxes, a move that US 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. He tweeted last month we will announce a substantial reciprocal action on Macrons foolishness shortly! The so-called 301 investigation, which looks into unfair trade practices, is the same tool Trump used to slap tariffs on China over alleged intellectual-property theft.

Published on August 19, 2019
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