The French have a plan on how to tax global technology companies (opens in new tab) with huge revenues, but some of the companies claim the tax is unfairly targeting American businesses.
Google’s, Amazon’s and Facebook’s representatives spoke in front of the US Trade Representative’s Office (USTR) recently, where they said that the tax will not only harm revenues and slow down local businesses, but that it is also unfair towards American companies.
The tax (opens in new tab), which came into law earlier this year, says that all global technology companies that have more than $830 million in revenue need to pay a three per cent tax in France.
Under such a rule, roughly 30 companies would need to pay - mostly American companies.
However the three tech giants urged US President Trump not to respond with tariffs on French goods, as that would only make things worse.
Jennifer McCloskey, vice president for policy at Silicon Valley’s lobby group the Information Technology Industry Council, said: “We support the US government’s efforts to investigate these complex trade issues but urge it to pursue the 301 investigation in a spirit of international co-operation and without using tariffs as a remedy.”
Amazon’s international tax policy director Peter Hlitz said the increase in expenditure would only be passed on to sellers, consequently hurting their earnings.
“Its revenue thresholds were set high so that it would apply only to a small number of almost entirely non-French companies,” Hiltz wrote in pre-submitted evidence. “The revenue thresholds and covered services bring numerous US, but very few French companies within the tax’s ambit.”
As of October 1, some 10,000 French businesses will have to pay three per cent more (opens in new tab) on sales through Amazon.