U.S. and French negotiators reached a deal allowing France to tax American big tech companies, Reuters reported Monday.
French President Emmanuel Macron pushed a digital tax in July, which prompted U.S. President Donald Trump to threaten a separate tax on French wine imports. France’s 3% tax is discriminatory against Google, Amazon and other companies, U.S. Trade Representative Robert Lighthizer said in a press statement at the time.
French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow etched out a deal compelling France to repay companies the difference between the tax and a planned mechanism drawn up by the Organisation for Economic Co-operation and Development (OECD).
“Trump’s adviser is OK with the proposal,” a source familiar with the negotiations told reporters, referring to the deal that depends on the OECD’s mechanism. “That would be the mechanism at this stage. That’s the joint proposal.” (RELATED: Amazon Praises Trump For Pushing Back Against France’s Tax On US Tech Companies)
The agreement will be submitted to Trump and Macron Monday at a G7 leaders summit in Biarritz, France. The country’s 3% levy applies to revenue from digital companies with more than $27 million in French revenue and $830 million worldwide. Macron has been searching for ways to fill revenue pitfalls after France’s gas tax collapsed in January.
Trump’s initial reaction to the tax came as a surprise given his administration’s overall opposition to big tech companies like Google and Facebook, both of which the president believes discriminate against conservatives. It also comes as a bipartisan group of American lawmakers and Trump seek to open antitrust investigations against Silicon Valley.
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