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Trump trade representative to investigate French tech tax

SeattlePI.com Wednesday, 10 July 2019
WASHINGTON (AP) — The White House is launching an investigation into France's proposed tax on internet giants like Google, Amazon and Facebook — a move that could lead to U.S. taxes on French imports.

U.S. Trade Representative Robert Lighthizer expressed concern that the tax, expected to be passed by the French Senate Thursday, "unfairly targets American companies."

Lighthizer's agency will investigate the tax under Section 301 of the Trade Act of 1974 — the same provision the Trump administration used last year to probe China's technology policies, leading to tariffs on $250 billion worth of Chinese imports.

The French digital services tax would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than 750 million euros ($844 million) and French revenue exceeding 25 million euros.

France's lower house of parliament approved the pioneering tax last week.

The bill aims to stop multinationals from avoiding taxes by setting up headquarters in low-tax EU countries. Currently, the companies pay nearly no tax in countries where they have large sales like France.

The tax primarily targets those that use consumers' data to sell online advertising. The French Finance Ministry has estimated that the tax would raise about 500 million euros annually ($563 million) at first — but predicted that collections would rise "quickly."

The tech industry warns it could lead to higher costs for consumers. The levy could affect U.S. companies including Airbnb and Uber as well as those from China and Europe.

Bob Atkinson, president of the Information Technology and Innovation Foundation, issued a statement welcoming Lighthizer's investigation. "Digital services taxes are an ill-disguised effort to target companies that are thought to be...
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News video: U.S. may bite back after France taxes tech firms

U.S. may bite back after France taxes tech firms 01:41

France has voted to put an extra 3% tax on tech firms, and Washington is already thinking about whether to retaliate. Julian Satterthwaite reports.

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