US, France reach deal on tech tax
French and American negotiators have reached an agreement on France’s digital tax law.
A source close to the negotiations told Reuters that the deal made between French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow would have France repay companies for the national tax once the Organization for Economic Cooperation and Development establishes an international system for digital taxes.
The draft agreement was reportedly given to President Trump and his French counterpart Emmanuel Macron during the Group of Seven summit Monday.
“Trump’s adviser is OK with the proposal,” the source told Reuters. “That would be the mechanism at this stage, that’s the joint proposal.”
The new French law places a 3 percent tax on yearly revenues of technology companies that make at least 750 million euros annually and provide services to users in France, affecting companies such as Apple, Google, Facebook and Amazon.
Those companies have said the tax unfairly affects U.S. businesses and could harm their operations.
French President Emmanuel Macron praised the deal his country reached with the U.S. on France’s digital tax as a “very good agreement.”
“The idea is that we need to find a joint agreement in order to address joint international problems,” Macron said at a joint press conference with President Trump following the Group of Seven. “And the situation right now is very negative, and the international tax system definitely needs to be modernized, and I think we will work together in a spirit of cooperation on this.”
Macron also took to Twitter to tout the agreement after the press conference.
“Some digital players pay very little tax. This is an injustice that destroys jobs. @realDonaldTrump and I have just agreed to work together on an agreement at the @OECD level to modernize international tax rules,” Macron tweeted.
HOLD ON…: Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, though, said in a statement Monday that the Trump administration “should reject any deal that allows France and other countries to move ahead with discriminatory taxes on U.S. technology companies, in exchange for vague promises down the line.”
“If Donald Trump gives France a pass now, then it will be open season for foreign governments to go after major American employers,” Wyden said.