French finance minister vows after US withdraw its ‘provocation’

The French finance minister said on Thursday that  Washington’s withdrawal from negotiations aimed at striking a global tech tax deal is a “provocation” and France will apply its own digital levy regardless of threats of retaliation,.

U.S. Treasury Secretary Steven Mnuchin wrote to four European countries on Wednesday to inform them of Washington’s decision to pull out of the digital tax talks organized by the Organization for Economic Cooperation and Development. The move came after the U.S. earlier this month announced it was launching trade investigations that could lead to tariffs on countries if they adopt digital service taxes that Washington determines unfairly target American internet giants.

“This letter is a provocation, a provocation to all OECD partners,” French Finance Minister Bruno Le Maire told France Inter radio. “We were inches away from an agreement on digital taxation at a time when the digital giants are the only ones in the world to have benefited immensely from the coronavirus crisis.”

He continued: “So it is a provocation not only to all those in the OECD who were negotiating in good faith, but also to all the citizens of the world who say that it is still legitimate for all the digital giants to pay their taxes. It is also a provocation to the U.S. allies. What is this way of treating U.S. allies — the British, Spanish, Italians, French — by threatening us with sanctions?”

After U.S. President Donald Trump threatened to slap tariffs on French luxury goods, Paris backed down from efforts to levy hefty taxes on some of Silicon Valley’s biggest names in January, delaying implementation while the OECD negotiations continued. But France warned it would enforce its tax if no agreement was reached by the end of this year. Now, the tax is back on, Le Maire confirmed.

“There will indeed be, as I have always promised, a digital tax in 2020 in France,” he said Thursday.

Pic Credit: https://home.treasury.gov/media/28011

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