French lawmakers recently approved a new digital services tax that will apply to major tech players such as Google and Facebook operating in France. The tax targets companies with over 750 million Euros in revenue, at least 25 million of which must originate from within France. This move aims to address concerns over tech giants not paying adequate taxes in countries where they conduct substantial business. These companies often report the majority of their profits in their home countries.
Although the French government’s decision has been finalized by the Senate, it may lead to tensions with the US. President Donald Trump has expressed interest in investigating this tax through a “Section 301” inquiry, potentially sparking a trade dispute between the US and the EU. France has indicated a willingness to abandon the tax if an internationally agreed-upon alternative is reached. The OECD is currently spearheading discussions on how to tax global tech firms, with the US participating in these talks while simultaneously conducting its own investigation into the matter.
