France orders Facebook, Amazon and other big tech firms to pay digital tax

The French Finance Ministry on November 25 informed that the country is resuming collection of a special tax on big tech companies, including Facebook and Amazon. According to the Associated Press, France had suspended collection of the tax earlier this year in exchange for an American promise to drop the tariff threat pending talks on an international deal on taxing online companies. However, the Finance Ministry had long said that it would collect the tax in December as planned if the talks proved unfruitful by then, which is what happened when the countries involved agreed last month to keep negotiating until mid-2021. 

While France was hoping that an accord could be reached by this year, Trump administration, however, pulled out of the negotiations, which were led by the Organisation for Economic Cooperation and Development. Now, the French Finance Minister Bruno Le Maire said that France will again levy tax. He further informed that the companies subject to the tax have already received notice to pay the 2020 installment. 

Marie said, “We naturally hope that the Italian presidency of the G20 will provide the impetus to reach an agreement within the OECD, which could be supported by all European countries, concerning a fair tax on tech giants”.

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US says taxes unfairly target American companies

The Finance Ministry official said that the French Treasury has sent the 2020 tax bills to Amazon, Google, Facebook and other companies affected by the measure last week. Additionally, the Ministry also expects the tax revenue to total a bit more than last year because big tech companies have had a good year amid the unprecedented coronavirus pandemic. According to AP, last year, the tax had brought around $400 million euros to the French budget. 

Meanwhile, other European countries have also imposed similar measures, which are aimed at forcing online giants to pay full taxes in the countries where they do business. While Paris said that it will withdraw the tax as soon as the OECD deal is reached to update the rules on cross-border taxation, US officials, on the other hand, have argued that the taxes unfairly target successful American companies. France, however, has said that the tax aims at all big tech companies that make money online. 

(With inputs from AP) 

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