The global digital corporate tax dispute between the United States (US) and France seems to be melting. France, which plans to tax US-based companies, Google, Facebook and Amazon, finally resigned.
Quoted from Reuters, the two countries have reached an agreement to end the dispute over the digital company tax. Under the agreement, France will pay the difference between digital taxes to digital companies and the types of tax mechanisms currently being made by organizations for cooperation and economic development (OECD).
“We have done a lot of work on a bilateral basis, we have an agreement to overcome difficulties between us,” French President Emmanuel Macron said in a joint news conference with US President Donald Trump at the G7 Summit in Biarritz, France Monday (8/26/2019) .
Macron also alluded to the preference of international rules regarding digital taxes. He guarantees that if there are international rules, then France will abolish their tax rules.
Earlier, last month, France issued a tax of 3% for digital businesses owned by giant technology companies. The intended company is those who collect a large amount of user data and sell advertising based on certain targets through internet channels.
Although the digital tax applies only to companies with income of more than 25 million euros or the equivalent of US $ 27.7 in France, or multinational companies with income of 750 million euros or the equivalent of 830 million US dollars. Which indirectly mentions the tax applies to three giant American digital companies.
The rules made US President Donald Trump furious and threatened to retaliate with tariff action after France passed legislation earlier this year. The tax was immediately responded by the United States government.
The US Office of Trade Representatives immediately launched an investigation in July about the possibility of tax laws imposed by France in the category of unfair trade practices. Because, most of the multinational digital companies come from the United States. President Trump has even threatened to retaliate by imposing a tax on wine or wine from France.
“We are taxing US companies, they are not (entitled) to tax our companies,” Trump said last month.