France rejected the US suggestion that companies should have the option to avoid France’s proposed international tax. The disagreement arises from differing views on how the tax should be applied.
France took the lead in proposing a new global tax system with the introduction of a “digital tax” during the G20 meeting in June. The French Finance Minister clarified that this tax would be phased out once an international agreement on taxation is reached. While the US acknowledges the necessity of such a tax, disagreements persist between the two nations regarding its implementation.
The US perceives France’s efforts to impose an international tax on large tech corporations as disproportionately affecting American businesses. In response, the US suggested a provision that would enable companies to opt out of the tax. However, France rejected this proposal, prompting French Finance Minister Bruno Le Maire to call for sincere negotiations from the US.
Many countries have grown frustrated with the practice of major tech firms legally evading tax obligations. Companies like Amazon can register their profits in countries offering low tax rates, such as Ireland, irrespective of their customer base’s location, which often spans multiple countries for tech giants.
Le Maire expressed skepticism towards the US proposal to permit companies to exempt themselves from the proposed international tax. He stated, “I haven’t seen many companies willingly subject themselves to taxation. While we can appreciate philanthropy, it is insufficient for public finances,” highlighting his concerns.
