U.S. and French negotiators reached a deal allowing France to tax American big tech companies, Reuters reported Monday.
French President Emmanuel Macron pushed a digital tax in July, which prompted U.S. President Donald Trump to threaten a separate tax on French wine imports. France’s 3% tax is discriminatory against Google, Amazon and other companies, U.S. Trade Representative Robert Lighthizer said in a press statement at the time.
French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow etched out a deal compelling France to repay companies the difference between the tax and a planned mechanism drawn up by the Organisation for Economic Co-operation and Development (OECD).
“Trump’s adviser is OK with the proposal,” a source familiar with the negotiations told reporters, referring to the deal that depends on the OECD’s mechanism. “That would be the mechanism at this stage. That’s the joint proposal.”
The agreement will be submitted to Trump and Macron Monday at a G7 leaders summit in Biarritz, France. The country’s 3% levy applies to revenue from digital companies with more than $27 million in French revenue and $830 million worldwide. Macron has been searching for ways to fill revenue pitfalls after France’s gas tax collapsed in January.
Trump’s initial reach to the tax came as a surprise given his administration’s overall opposition to big tech companies like Google and Facebook, both of which the president believes discriminate against conservatives. It also comes as a bipartisan group of American lawmakers and Trump seek to open antitrust investigations against Silicon Valley.
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