USA to probe French plan to tax tech companies

France to slap new 'ecotax' on plane tickets from 2020

France to slap new 'ecotax' on plane tickets from 2020

Section 301 investigations often result in tariffs if they find that the USA has been unfairly targeted.

Amid rising public outrage at the minimal tax paid by some of the world's richest firms, French lawmakers are due to approve the proposed Digital Services Tax (DST) law as soon as Thursday.

Companies such as Alphabet Inc's Google, Apple Inc, Facebook Inc and Amazon.com Inc would likely be subject to the tax.

The tax could lead to trade penalties from Washington as President Trump's probe is also likely to worsen tension between the United States and Europe.

A number of other countries are considering similar levies amid the belief that wealthy USA tech giants aren't paying enough tax worldwide.

Earlier, France said that it would start taxing giant USA targets digital companies with global annual sales of more than 750 million euros ($849 million) and sales in France of at least 25 million euros after European Union failed to agree on the bloc-wide digital tax.

"The United States is very concerned that the digital services tax. unfairly targets American companies", the U.S. trade representative said on Wednesday.

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French officials didn't immediately provide comment.

The issue for Paris, however, is all about "fiscal justice", as France seeks to generate an additional €500 million ($566 million) from the new tax scheme, Economy Minister Bruno Le Maire said when he introduced the legislation.

A United States tech-industry trade association this week criticised the French measure, saying tax disputes should be settled through a multilateral negotiation now being led by the Organisation for Economic Cooperation and Development.

Jennifer McCloskey, vice president of policy at ITI, a U.S. tech-industry association said in a statement: "France's move to enact a unilateral, national digital tax opens the door to a fragmented, inefficient global tax system that would reduce business certainty and impede innovation, job creation, and economic growth worldwide".

Lighthizer said the United States "will continue its efforts with other countries at the OECD to reach a multilateral agreement to address the challenges to the worldwide tax system posed by an increasingly digitized global economy".

Bloomberg also said that Trump would order the probe into the tax, quoting two sources.

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