American-Proposed International Tax Rejected By France

Credit: Reuters

France rejected the US proposal for companies to opt out of France’s proposed international tax.

France started leading the way for a new international tax system when the country’s Finance Minister launched a small “digital tax” at the G20 meeting in June. The French Finance Minister stated that tax would be cancelled once an international framework is agreed on. The US agrees there is a need for an international tax, but the two countries have several disagreements on how the tax should be implemented.

The US sees France’s recent attempts at creating an international tax on big tech companies as unfairly targeting American companies. As such, the US proposed an arrangement that would allow companies to opt out of the tax. France rejected the proposal and French Finance Minister Bruno Le Maire urged Washington to negotiate “in good faith”.

Many countries have become frustrated by big tech companies’ ability to legally avoid paying any taxes. Big companies like Amazon can book their profits in countries like Ireland, where taxes are low. They can do this regardless of where their clients are located, which is in many countries in the case of big tech companies.

Le Maire is highly skeptical of the US proposal to allow companies to opt out of the proposed international tax. “I haven’t seen a lot of companies that freely accept to be taxed. We can always count on people’s philanthropy, but it doesn’t go very far for the public finances,” Le Maire explained.

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