US to defer action over French digital tax

The Trump administration will announce actions against France over its digital services tax but will defer them while France defers tax collections from the US technology firms, US Trade Representative Robert Lighthizer said on Thursday.

The actions, expected by industry to be announced on Friday, are tied to a US Section 301 probe into France’s digital tax, which Washington says discriminates against US tech firms such as Google, Facebook and Apple Inc.

The United States last month withdrew from multilateral talks to reach a global solution on digital services taxation, citing a lack of progress in the negotiations.

“We’re going to announce that we’re going to be taking certain sanctions against France, suspending them like they’re suspending collection of the taxes right now,” Lighthizer told an online event hosted by the London-based Chatham House think tank.

Officials from the European Union delegation and French Embassy in Washington were not immediately available to comment. One industry source said USTR could announce an action on Friday reserving the right to impose tariffs on around $500 million worth of French goods that were included in a larger list published in December, while deferring implementation.

USTR in December said it could slap punitive duties of up to 100% on $2.4 billion in imports from France, after concluding the French tax would harm US tech companies.

The list targeted some products that were spared from 25% tariffs imposed by the United States over disputed European Union aircraft subsidies.

Spokespeople for the European Union delegation in Washington and the French embassy could not immediately be reached for comment.

The issue will be a topic when finance ministers from both the Group of Seven advanced economies and the Group of 20 major economies meet in coming weeks.

Published in The Express Tribune, July 11^th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.