French digital tax may rachet up long-simmering dispute with US

FRANCE has finally gone ahead with plans to impose a tax on US technology giants - come what may.

The so-called GAFA quartet (Google, Amazon, Facebook and Apple) have been told they would have to pay a new digital tax on their 2020 earnings in France.

Thus Paris risks ratcheting up a long-simmering dispute over forcing US firms to pay taxes in the countries where they operate. The Trump administration has threatened to impose a countervailing 25 per cent tax on French fashion and luxury products imported into the US. The dispute goes back to 2019 when France applied a 3 per cent levy on revenue from digital services earned in the country by companies with revenues of more than 25 million euros there and 750 million euros worldwide. The tax was expected to rake in 400 million euros but the collection was suspended after talks with US officials, ostensibly pending a global tax deal under an Organisation for Economic Co-operation and Development (OECD) framework.