Large tech companies (with global operations) are increasingly on the radar of taxing authorities.
Canada is proposing a 3% digital services tax.
(On companies with more than C$1 billion worldwide revenues.)
The tax is set to take effect in April, 2020.
Tax regulators in Italy, Turkey, Hungary and other countries have either proposed or already approved a digital tax.
France is leading the way.
Its 3% digital services tax applies to companies with over $800 million worldwide revenue.
What do Americans think about this tax?
They say the tax unfairly targets U.S. companies (Facebook, Google, and Amazon).
“The French digital services tax is unreasonable, protectionist and discriminatory,” said top Republicans and Democrats.
(Republicans and Democrats agreeing on something — amazing, isn’t it?!)
The tax has prompted the U.S. Trade Representative’s office to launch an investigation.
The investigation (Section 301) has found the French tax to be “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies.”
The French stand their ground:
“We will not give up on taxation” of digital firms.
Americans threaten to retaliate with 100% tariffs on $2.4 billion imported products from France.
Including French cheese and wine.
And that is really bad news!
What’s gonna happen to all Gruyere cheese lovers?!
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