US to announce response to French tech tax on December 2

[WASHINGTON] Trump administration trade officials announced on Wednesday that they will offer an official response on Monday to the French tax on US technology giants following an investigation of the policy.

"The United States Trade Representative is in the process of completing its investigation," the agency said, adding that it will release the results on December 2 when it "also will announce any proposed action in the investigation."

The French tax, enacted earlier this year following votes in the legislature, imposes a three per cent levy on the revenues of technology firms earned in France, which often come from online advertising and other digital services.

The tax affects companies with least 750 million euros (S$1.13 billion) annually.

The French tax targets revenue instead of profits, which are often reported by tech giants in low-tax jurisdictions like Ireland in a practice that has enraged governments.

Last month, G-20 ministers meeting in Washington opened talks on an international system to tax global tech giants that the Organization for Economic Cooperation and Development aims would take effect by June.

Public outrage has grown over the practice of profit shifting, which critics say deprives governments of their fair share of tax revenue.

After the tax was enacted, Mr Trump in July vowed "substantial" retaliation for the French measure.

Following an August 26 meeting with French President Emmanuel Macron, the two sides agreed that France would scrap its digital tax once a new international levy being discussed is in place.

AFP