- US initiated the investigation of France’s Digital Services Tax on July 2019, under Section 301 of the Trade Act and determined in December that French DST is discriminatory restricting U.S. commerce as “the services covered are ones where U.S. firms are global leaders”. It also said it is inconsistent with prevailing international tax policy principles.
- It proposed additional customs duties of up to 100% on French products like cheese, Champagne, handbags and others with an approximate trade value of $2.4 billion.
- The press quoted Amazon, Google and Facebook as endorsing the Administration’s tariffs plan in the case a negotiated solution could not be reached over the French DST.
- Previous retaliatory 25% duties on wine are in discussion in a separate dispute over supposed European government aid to Airbus, which would now be increased to 100 percent.
- French Economy Minister mentioned told in early January 2020 that he and U.S. Treasury Secretary were doubling their efforts to try and reach a compromise on digital taxation at the OECD, giving themselves time until next meeting in Davos ending January: “We want to try all options to reach an agreement at the OECD in the next 15 days,” Le Maire said.
- EU Commissioner for Trade increased the temperature of the debate when confirmed that they back Paris in this dispute:
“The European Commission will stand together with France and all of the member states who wish to have the sovereign right to impose digital taxation on companies in a fair way. We will look at all possibilities if any tariffs and measures are imposed by the US”.
- Days after, Mr Le Marie stated outright that the recent U.S. proposal that the future international tax reform could be optional for companies is a “non-starter” and is “no longer on the table”, and that it was up to U.S. authorities to make a move on the French digital tax…
- Even when the US Trade Office wants to send a very strong signal to the world with the French DST case, and they also confirmed on January 17th that it reserves the right to take retaliatory measure if the Czech Republic imposes a 7% Digital Services Tax, the reality is that other countries like Spain, Italy, Austria, Turkey and the UK have either passed or firmly stated their interest in doing so despite those type of warnings.
And a good number of LATAM, African and Asian countries are heading to the same direction.
It is every day more obvious that global consistent solution is necessary or not only the tax table, but the international commerce trade balance will suffer on a very deep basis.
We refer to the title we have provided to this article, where all it is said