The vice president of Global Trade Affairs of the National Foreign Trade Council (NFTC), Jake Colvin, warned that US exporters are concerned about the start of charging for digital services in France.
Colvin raised that concern in response to French Finance Minister Bruno Le Maire’s announcement that France will start collecting taxes on digital services after the Organization for Economic Cooperation and Development (OECD) pushed back its deadline for a solution. consensus-based global approach to fiscal challenges arising from digitization.
“France’s decision to collect taxes on digital services is extremely worrying and is directly contrary to the recommendations of the OECD leaders to avoid taking unilateral measures,” he said.
For the NFTC, moving forward with a unilateral digital services tax threatens to undermine the existing political momentum to find a multilateral consensus in the OECD and worsen bilateral economic relations with the United States.
“This measure by France will only cover other countries to advance in the implementation and collection of other discriminatory taxes on services, which would weaken the global international tax framework,” he added.
France formally enacted a tax on digital services on July 24, 2019. This tax applies retroactively to income from digital services as of January 1, 2019 and is a 3% tax on gross income derived from two digital activities in which French “users” are considered to play an important role in creating value: intermediation services and advertising services based on user data.
The law excludes certain services, including digital interfaces for the delivery of “digital content.”
The tax applies only to companies with annual revenues from covered services of at least € 750 million globally and € 25 million in France.
Covered companies must calculate income attributable to France using formulas specified in the law.