• Register
Return to: Home > News > Financial Results > US to investigate France’s digital services tax

US to investigate France’s digital services tax

US Trade Representative (USTR) Robert Lighthizer has begun an investigation under Section 301 of the Trade Act of 1974 of France’s digital services tax (DST). The proposed DST bill would impose a 3% tax on total annual revenues generated by some companies from providing certain digital services to, or aimed at, French users. 

The tax applies only to companies with total annual revenues from the covered services of at least EUR 750m globally and EUR 25m  in France.  The services covered are ones where US firms are global leaders. The USTR believes the structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain US-based technology companies.

“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow [11 July 2019] unfairly targets American companies,” said Lighthizer.  “The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”

Section 301 and related provisions of the Trade Act (codified as amended in 19 U.S.C. §§ 2411-2417) give the USTR broad authority to investigate and respond to a foreign country’s unfair trade practices.

Reaction has come from the European Parliament, interpretingthe move as a step that could lead ultimately to the imposition of tariffs on French companies by the US.  MEP Molly Scott Cato, Member of the Committee on Financial and Monetary Affairs, said: "We support France' attempts to make tech companies pay their taxes where they operate and generate revenue. This decision by the US is putting at risk the OECD negotiations for modernising tax rules for the digital economy, and to make digital companies pay their fair share in taxes.

"The current situation is a result of failure at the EU-level to agree on a digital services tax and it shows that the unanimity rule is undermining the European position on the global level. It's a weakness of EU decision-making that only four Member States managed to block EU action on a tech tax."

Top Content

    South Africa: sensing new opportunities

    It has been an interesting couple of years for the profession in South Africa. A number of high-profile scandals have brought the profession and the role of auditors into sharp public focus, brewing a distrust towards accountants and a large expectations gap. Joe Pickard reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.