Emmanuel Macron announced that France and the United States ratified an agreement at the G7 summit in Biarritz, on this issue which is a source of irritation in Washington. Paris undertakes to withdraw this tax on digital companies when an agreement is reached at the OECD, and to reimburse companies that have paid more than under the framework developed at the OECD.
Is the hatchet definitely buried? Emmanuel Macron announced during a joint press conference with Donald Trump that their two countries had found a solution to end the tensions arising from the creation of a tax on digital giants in France, perceived as a protectionist weapon to Washington.
“There is a lot of nervousness about this famous French digital tax. I think we found a very good agreement ”, explained the French Head of State to his American counterpart at the end of the G7 summit which was held in Biarritz. Enough to ward off the threats of retaliatory measures against French wine exports to the United States, brandished for several weeks by the American leader.
EDITORIAL – Gafa tax: the glass half full
On the podium, Donald Trump did not deny the French president. But he did not confirm this agreement in person either, just joking that his wife “Very much liked French wine”. “If the American president had disagreed with Emmanuel Macron, he would not have been shy to say so. There is still technical work to be done, but we have managed to relieve the tensions ”, assures a French source.
Versatile Donald Trump
All day Monday, French diplomats watched and feared the reaction of the versatile Donald Trump to a solution negotiated throughout the weekend between Bruno Le Maire, the French Minister of the Economy, and the US Secretary of the Treasury, Steven. Mnuchin. These negotiations were made necessary, after the strong criticisms emitted in Washington on the “Gafa tax” voted at the beginning of the summer in the National Assembly. It plans to tax from 2019 up to 3% of turnover all companies whose global digital sales exceed 750 million euros (and 25 million in France). The device should affect around thirty companies, a majority of which are American, and bring in 400 million euros in 2019 then around 600 million in 2021.
“Some actors don’t pay tax. It is not against this or that company that France wants to set up this tax but to settle the international problem ”, pleaded this Monday Emmanuel Macron. To appease Donald Trump, the French head of state however pledged that this Gafa tax would not be heavier than the future digital tax system currently negotiated within the OECD.
In detail, France will apply its “Gafa tax” in 2019 and 2020. As soon as a compromise has been found at the OECD – it is a question of allowing States to tax the digitized activities of companies, even if these are not physically present on the territory – so the United States and France will apply this new device bilaterally without waiting for the formal multilateral agreement. If the French “Gafa tax” turns out to be higher than what was decided at the OECD, then Paris has undertaken to reimburse the overpayment to the companies concerned. “This could apply in 2021”, specifies a French source.