France faces United States backlash on 3% digital services tax

French digital service tax target US companies unfairly says administration

French digital service tax target US companies unfairly says administration

And as part of these efforts, the French government has announced that, as of next year, it will be imposing a new tax on plane tickets.

The French digital tax is the first in Europe, but Great Britain, Spain and Austria are also developing similar policies.

She said that, in light of growing concerns about carbon emissions from trains, "France is committed to the taxation of air transport but there is an urgency here". Always eyeing a catchy slogan, he prefers to call his levy a tax on "Fangs", an acronym for Facebook, Amazon, Netflix and Google. President Trump criticized the new digital tax a day before the French Senate voted on the measure, but it passed anyway.

France pushed ahead with the tax after European Union countries failed to agree to a levy valid across the bloc in the face of opposition from Ireland, Denmark, Sweden and Finland. This is a tax charge for the largest digital businesses - search engines, social media platforms and online marketplaces - with global revenues over £500m and United Kingdom revenues over £25m to reflect the revenue derived from their United Kingdom users.

But French Economy Minister Bruno Le Maire France rejected the USA reaction, saying "threats" were not the way to resolve such disputes.

Some experts fear France's unilateral approach with the digital tax will backfire, ultimately harming consumers and smaller businesses it aims to protect.

The tax amounts to a 3% annual levy on the French revenues of digital companies with yearly global sales worth more than 750 million euros ($844 million) and French revenue exceeding 25 million euros.

On its own, a 3% tax such as France's would hardly dent the revenues of big tech companies. Instead, it is a targeted measure on three types of "digital activities:" online advertising, online intermediary activities and the sale of user data. "France is a sovereign country which makes sovereign decisions about its tax regime and it will continue to make sovereign decisions about its tax regime". Mr Boris Johnson, the man most likely to become the country's new prime minister by the end of this month, vows to hit the companies harder.

In a statement on Wednesday, the office of the US Trade Representative said the tax suggests unfair treatment of US-based tech companies.

British finance Minister Philip Hammond had announced such a tax already previous year, but is now determined to go on with it, as an worldwide agreement on the matter seems to be unlikely to get a short time resolution.

Once an appropriate global solution has been found, the United Kingdom would drop its own tax, the government added.

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