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Digital tax: the USA and France will waive special duties for the time being

2020-01-21T01:01:18.394Z

There is a rapprochement in the dispute between the United States and France over a tax on internet businesses. An agreement should be reached by the end of the year.



French President Emmanuel Macron and US President Donald Trump are trying to find a compromise in the dispute over the French digital tax for Internet companies. An escalation of the conflict with higher mutual tariffs should therefore be averted for the time being. Macron wrote on Twitter that he had an "excellent discussion" with Trump on the subject. A few hours later, the White House announced that in a phone call the presidents had agreed that it was important to complete "successful negotiations" on the digital tax.

Macron said he wanted to work with Trump for a "good deal" to prevent tariff escalation. According to information from the French news agency AFP, the two heads of state agreed to extend the talks until the end of the year.

The government in Washington last threatened to retaliate against France in December for introducing a digital tax. The U.S. government is reviewing special tariffs on French products such as champagne and cheese, a report by U.S. Trade Representative Robert Lighthizer said. The United States argues that France's national digital tax systematically discriminates against large American Internet companies such as Amazon, Google and Facebook.

US Treasury Secretary Mnuchin meets with French counterparts

France recently said it would stick to its tax and threatened European retaliation. In December, it was said that the US could propose up to 100 percent tariffs on French imports worth around $ 2.4 billion.

France single-handedly introduced a digital tax last summer. The project had previously failed at the European level. Corporations are affected which, with their digital activities, achieve worldwide annual sales of at least 750 million euros and in France of more than 25 million euros. Many of the companies affected are headquartered in the United States.

Macron's announcement marks a new turning point in the transatlantic conflict. At the beginning of the month, the French Minister of Economic Affairs and Finance Bruno Le Maire announced that efforts should be stepped up to find an international solution at the level of the OECD. According to AFP, Le Maire wants to meet with his US colleague Steven Mnuchin on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday.

Among other things, the draft submitted by the Organization for Economic Cooperation and Development (OECD) in October provides that taxation is not only based at the company's headquarters. Instead, international companies should also pay taxes where their customers or users of services are located and where the companies make profits.

Source: zeit

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