by Ulrika Lomas, Tax-News.com, Brussels
27 January 2020
On January 22, 2020, French Finance Minister Bruno Le Maire confirmed that France will suspend collection of its digital services tax this year to prevent the United States from applying retaliatory tariffs on a range of French goods.
Following talks with his US counterpart Steven Mnuchin against the backdrop of the World Economic Forum in Switzerland, Le Maire said that France will delay collecting digital tax payments until December 2020.
“The framework that we found with Steven Mnuchin is excellent news because it will give us time and a chance for international negotiation rather than entering a trade war that would penalize our winegrowers in particular,” Le Maire said in a tweet.
However, Le Maire has stressed that France will not repeal the digital tax, which he reiterated will remain in place until France is able to implement internationally-agreed digital tax measures.
The United States has threatened to impose tariffs of up to 100 percent on certain French products in retaliation for the digital tax, which the US argues unfairly discriminates against US-based technology companies.
The French DST is a three percent tax on the revenue of digital companies providing advertising services, selling user data for advertising purposes, or performing intermediation services. Companies with global revenues of EUR750m (USD831m) or more and French sales of at least EUR25m are required to pay the tax.
The US has also warned that it could impose tariffs on imports from other countries going ahead with unilateral digital taxes, including Italy and the United Kingdom.