France seeks EU response if US punishes French digital tax

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FILE PHOTO: The flags of France and the European Union fly above the French Consulate in central Istanbul, Turkey July 13, 2016. REUTERS / Murad Sezer

PARIS (Reuters) – France will immediately call for retaliation from the European Union if Washington decides in January on trade sanctions on a French tax on digital services, French Finance Minister Bruno Le Maire said on Tuesday.

The Trump administration announced in July an additional 25% tariffs on French cosmetics, handbags and other imports valued at $ 1.3 billion in response to France’s digital services tax, but said it would suspend the implementation of this decision until January.

“If there are American sanctions against the French decision, which … is the application of French law, we will immediately seek a response at European level,” Le Maire told reporters after a meeting with European counterparts on taxation. digital services.

France suspended collection of its digital services tax until next month as international negotiations were underway to rewrite the rules for cross-border taxation in the digital age.

The 140 or so countries involved in those talks agreed in October to continue negotiating until mid-2021 after talks halted as Washington hesitated to sign a multilateral deal ahead of the US presidential election.

France has gone ahead and sent notices to companies required to pay the December installment of the tax, which Le Maire said is expected to raise € 400 million this year.

The Mayor reiterated his commitment to revoke the French tax as soon as an international agreement was concluded.

Washington’s business partners are eager to see what the new Biden administration’s position is on the issue and to pave the way for an international deal.

Reporting by Leigh Thomas; Editing by Andrew Heavens and Alex Richardson

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