Could tax French wine in retaliation for digital tax

Could tax French wine in retaliation for digital tax

The 3% tax applies to the French revenues generated by about 30 major companies - mostly American - that provide digital services to, or aimed at, French users.

President Donald Trump said he "might" impose tariffs on wine from France after the country imposed a new digital tax that affects US technology companies.

'I've always liked American wines better than French wines, even though I don't drink wine, ' the president said. "If anybody taxes them, it should be their home country, the USA".

Apple - also a large, global tech giant - drew Trump's ire on Friday.

U.S. President Donald Trump enters the room to participate in the "Pledge to America's Workers - One year Celebration" event in the State Dining Room of the White House in Washington, U.S., July 25, 2019. According to 2018 figures from the European Commission, global tech companies pay a 9.5% average tax rate compared with 23.2% for traditional firms.

Trump believes that this unfairly targets American companies.

French Finance Minister Bruno Le Maire responded on Friday by saying that France would stick to its digital tax plans.

Later in the Oval Office, Trump told reporters the tax decision was wrong and he threatened the key French export. "Universal taxation of digital operations is a challenge that affects us all", he said.

France has long argued that taxes need to be in line with digital, no longer appropriate bodily presence.

Other EU countries, including Austria, Britain, Spain and Italy, have also announced plans for their own digital taxes. France had pushed for a EU-wide digital levy that was scrapped when four countries - Sweden, Finland, Denmark and Ireland - declined to sign off on it. France's new 3% tax will possible be in line with sales made within the country, in preference to on profits.

White House spokesman Judd Deere said in a statement on Friday that the administration is "extremely disappointed" and is "looking closely at all other policy tools", Bloomberg reported. "In the meantime, France will implement its national decisions", Le Maire said in response to Trump's warning.

He also managed to get in a shot at French wine.

The French government said the tax will end if a similar measure is agreed internationally.

Ahead of Mr Trump's tweet on Friday, US Alternate Representative Robert Lighthizer had offered an investigation into the French tax, arguing that France used to be "unfairly focusing on the tax at obvious US-essentially essentially based totally technology corporations".

The French law does not specifically target USA companies.



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