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A retaliation… six months from now. The Trump administration recently announced that the application of additional customs duties on $1.3 billion worth of French products has been postponed for six months.
The Gafa tax is once again on the rebound.
In response to France’s adoption of a digital services tax that unfairly targets U.S. digital technology companies, the Office of the U.S. Representative has decided to impose an additional 25% duty on French products with a commercial value of $1.3 billion.
However, the Trade Representative has decided to suspend the application of these additional duties for 180 days or 6 months.
This is to allow more time to try to resolve this dispute, notably through ongoing discussions within the Organisation for Economic Co-operation and Development (OECD), and in recognition of France’s agreement to delay collection of its tax until the end of the year.
The additional customs duties will be imposed on cosmetics and handbags.
But they spare other emblematic products such as champagne, camembert or roquefort.
On 11 July 2019, the French Parliament had definitively adopted the introduction of a tax on digital giants, making France a pioneer in the taxation of GAFA (Google, Amazon, Facebook and Apple) and other multinationals accused of tax evasion.
A tax deemed “unreasonable”
In January, the investigation by the Office of the USTR was completed and concluded that the tax was unreasonable and discriminatory against U.S. businesses.
That said, this investigation was followed by a period of requests for exemptions for certain goods which has just been completed.
The chair of the industry lobby, Matt Schruers, said in a news release that “today’s action sends a strong message that discriminatory taxes on U.S. companies are not a way to modernize international taxation”.
It should also be noted that in the autumn of 2019, the case appeared to be on the verge of being resolved diplomatically.
In this regard, the draft agreement had provided to leave in place the new French tax on the activity of large technology groups until the entry into force of a new international tax plan negotiated within the framework of the OECD.
Last Friday, the IMF (International Monetary Fund) called for an international agreement to resolve this conflict.
It believes it is important “to avoid trade and tax wars”.
Read also > FRENCH WINE AND SPIRITS EXPORTATIONS ARE STRUGGLING BECAUSE OF THE TRUMP TAX
Featured photo: © Louis Vuitton
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A retaliation… six months from now. The Trump administration recently announced that the application of additional customs duties on $1.3 billion worth of French products has been postponed for six months.
The Gafa tax is once again on the rebound.
In response to France’s adoption of a digital services tax that unfairly targets U.S. digital technology companies, the Office of the U.S. Representative has decided to impose an additional 25% duty on French products with a commercial value of $1.3 billion.
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A retaliation… six months from now. The Trump administration recently announced that the application of additional customs duties on $1.3 billion worth of French products has been postponed for six months.
The Gafa tax is once again on the rebound.
In response to France’s adoption of a digital services tax that unfairly targets U.S. digital technology companies, the Office of the U.S. Representative has decided to impose an additional 25% duty on French products with a commercial value of $1.3 billion.
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