PARIS (Reuters) – the President of france, Emmanuel Macron, is pressing ahead with a digital tax in France, in a move that the AMERICAN President, when He is described as a “folly”, the French leader in the international agreement on the taxation of the big tech companies.
FILE PHOTO: france’s President and Emmanuel Macron delivers a speech during a ceremony to mark the 75th anniversary of the landing of the Allied forces in Provence during the second world War, who helped liberate the south of France, Boulouris, France, on August 15, 2019 at the latest. (REUTERS photo/Eric Gaillard/Pool
Late on Wednesday, Macron urged upon the Home administration to help the overall reform of the corporate income tax.
Macron will be looking for common ground He and the other G7 leaders, at a summit in Biarritz this weekend. Washington has also expressed concern that the U.S. Internet companies are being unfairly targeted.
Here is a guide to the digital tax debate.
WHAT IS A DIGITAL TAX?
The governments of the major European countries have been plagued by their inability to tax the profits of multinational technology companies that it believes have been diverted in their jurisdictions.
Internet giants such as Facebook (FB.(O), Google (GOOGL.O) and Amazon (AMZN.D) be currently in a position to book profits in low-tax countries such as Ireland and Luxembourg, where the revenue is coming from.
Macron said the burden of big tech’s more a matter of social justice.
The French leader is working hard to push for a digital load is to cover by the member states of the European Union, but ran into resistance from the republic of Ireland, Denmark, Sweden, norway and Finland.
WHAT HAS FRANCE DONE THIS?
After the talks, the EU’s digital tax is out of the way to go, the Macron, the law says you have to have your own one-sided load.
The 3% tax applies to income from services is earned by businesses with more than 25 million euros in the French and turnover of 750 million euros ($830 million) in the world.
Paris is not only among the European cities included in the proposal for a tax on big tech. The united kingdom, Spain, Italy, and Austria, have also announced plans for their own digital revenue.
WHAT DOES the MACRON’d like TO ACHIEVE IN THE G7?
The goal is to get to a broader agreement, under the auspices of the G20 and the OECD. Macron wants G7 leaders to agree on the principle of a universal tax to support this effort.
The G-20 finance ministers agreed in June to compile a common set of rules to close tax loopholes, and promised to “double the effort” to create a consensus-based solution is to be found in the by the year 2020.
At the G7 finance ministers reached an agreement over the next month, there should be a minimum amount of the tax is to discourage countries from competing in a race to the bottom”.
“Now that the G20 is set to discuss the issue further, there’s not much left for the G7 in order to do so,” a Japanese government official said. “We (Japan) are hoping to keep in step with France. However, that does not mean that the G7 will decide on something in this.”
WHAT ARE THE OBSTACLES STANDING IN THE WAY?
Home. The US president, who has been lambasted Macron’s “folly” in the pursuit of the French digital levy, and has threatened to load up on French wine in retaliation.
The row illustrates how the digital charge, it can open up a new front in its trade dispute between Washington and the EU, as well as economic relations between the two seem to be miserable.
Trump’s threat to “punish” France should not be taken lightly. It was followed by US trade representative Robert Lighthizer, the office of the notice, an assessment of the French tax, of which he is an unfair trade practice which is punishable as AMERICAN tech companies for their commercial success.
Low-tax jurisdictions do not have any doubts about Macron’s tax plan, because it will make it more difficult for them to attract foreign direct investment (fdi), with the promise of ultra-low corporate tax.
Reporting by Richard Lough; Editing by Hugh Lawson