GAFA tax: what the law says, what the US administration wants

In France, the Digital Giants Tax Act, known as the GAFA Tax, was finally passed in the Senate today after being voted last week in the House. While a European or international consensus still does not exist ...


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The French Parliament voted definitively a tax on GAFA (Google, Apple, Facebook, Amazon), July 11, 2019. Reuters

In France, the law on the digital giants tax, called the GAFA tax, was finally adopted in the Senate today after being voted last week in the Assembly. While a European or international consensus has still not been found, France takes the lead and becomes one of the first countries to tax the turnover of Google, Amazon, Facebook, Apple and others. What anger the United States, a country from which many of these groups come, and announced to open an investigation.

The law was conceived right after the outbreak of the "yellow vests" crisis to " restore fiscal justice ". It targets digital giants who play the flaws of the international tax system by setting up their headquarters where taxation is more lenient.

From now on, in France, they will be levied at 3% on their turnover when it exceeds 750 million euros worldwide and reaches at least 25 million in France, where users are. A hundred companies active in France, from Google to Apple, through Airbnb, Instagram or even French Criteo will be targeted on their online advertising activities, selling data for advertising purposes or linking Internet users on the Internet. platforms.

US opens investigation into GAFA tax bill in France

The French state hopes to draw 400 million euros this year. Even if the text voted on July 11 has removed the mention " temporary ", the law will not be eternal, swear the Minister of Economy Bruno Le Maire who considers it as a lever at the international level to advance the idea at multilateral level. That's not counting Washington's reaction that is already challenging the law.

US President Donald Trump ordered his administration on Wednesday (July 10th) to open an investigation into the proposed GAFA tax in France, a process that could lead to the imposition by the United States of
customs duties on French products or other retaliatory measures.

"Between allies we must settle our differences differently than by the threat"

I would like to remind you that this is the first time in the history of relations between the United States and France that the American administration has decided to open proceedings under section 301. And I deeply believe that between allies we can and must resolve our differences other than by threat ...

Bruno Le Maire, Minister of the Economy and Finance 11/07/2019 - by RFI Play

So where does this survey come from? What are the potential consequences for Franco-American relations? Elements of answers with Jeremy Ghez, author of USA: improbable decline, impossible rebound

It is under a 1974 law that allows the US executive to explore the possibility of countries taking discriminatory action against US interests. it is on the same procedure that Donald Trump rested to impose tariffs on China [...] France, American ally, is treated at the same level as China at the commercial level.

Jeremy Ghez, Professor of Economics and International Business at HEC 11/07/2019 - by RFI Listen

ref: rfi