US Reprisal Against French "GAFA" Tax

[Dimitri]

U.S. to investigate planned French tax on Apple, other tech giants
President Donald Trump is planning to launch a probe into France's intent to implement a digital tax initiative targeting large internet companies, an investigation that could lead to tariffs or trade restrictions.
[appleinsider.com...]

France wants to create a 3% tax which would apply to roughtly 30 Internet companies (GAFA = Google Amazon Facebook Apple, but became a generic word for big Internet companies). The tax should be calculated on the turnover generated by these companies in France, but France would like this tax to be extended to the whole EU. The argument to support this tax is that, these companies are abusing fiscal optimizations to pay barely nothing in EU countries.

[graeme_p]

So the US wants to tell the French what taxes they can impose on firms French operations?

It seems a perfectly reasonable response to these companies tax dodging.

Either looking for an excuse to impose tariffs or simply in the pocket of big tax dodgers.

[Dimitri]

To be precise, and if I don't make mistake, this tax should apply to all companies serving digital services, if their worldwide turnaround is 750 millions euros and more, AND if their French turnaround is 25 millions euros and more. So, roughly 30 companies are concerned by this tax, including the French company Criteo.

[Dimitri]

Amazon says French clients to bear cost of France's new digital tax
Amazon plans to pass on the costs of France's new digital tax on internet giants to the businesses that use its Marketplace platform for finding customers, instead of taking the hit itself, the US online retailer said Thursday.
[msn.com...]

[Marshall]

The argument to support this tax is that, these companies are abusing fiscal optimizations to pay barely nothing in EU countries.

This is nothing new. Multi national corporations have been dodging taxes for years.

Amazon says French clients to bear cost of France's new digital tax

Is this not always the case whether stated openly or not.

Taxing corporate income of multi nationals is nearly impossible given all the loop holes and tax dodging tricks. A sales tax is the only fair way, IMHO.

[graeme_p]

Amazon plans to pass on the costs of France's new digital tax on internet giants to the businesses that use its Marketplace platform for finding customers

Unless businesses using the marketplace absorb the entire cost themselves it will raise prices, which means they will lose sales to other platforms or retailers.

[Dimitri]

which means they will lose sales to other platforms or retailers.

Supposing that there are other platforms and retailers :)

[lucy24]

So the US wants to tell the French what taxes they can impose

:: quick upward glance to confirm that this is Foo ::

I am strongly reminded of a longago editorial in the Washington Monthly that began with roughly these words:
“In Florida, the doctors and the trial lawyers--two groups who richly deserve each other--”
... and I forget the rest.

[JS_Harris]

So the US wants to tell the French what taxes they can impose on firms French operations?

Not quite. It's Trump, he's pro American, not pro Globalist or socialist. His interest begins and ends in what foreign governments are doing to US companies so yes, if a foreign gov wants to tax a US company a little out of the norm he wants details.

I'm not sure he'll be as gung-ho about protecting Apple now that Apple is moving jobs to China though. I think Apple just asked for tarrif relief for their China operations because they have an American presense and he flatly said no and suggested that they can move the jobs back to the US if they don't want to pay China tarrifs.

France has socialist income tax rates already don't they? Upwards of 75% ? That would also make big companies a juicy target, their citizens are strapped. I vaguely remember stories about wealthy actors like Gerard Depardieu immigrating out of France to Russia to avoid the huge personal tax rates. He returned to France as a Russian Citizen. Taxes in France are no joking matter.

[Dimitri]

Upwards of 75%

This is for the higher incomes only. Half of French household do not pay income taxes, and the two first ranges pay something like 5 and 15%, or something like that.

Taxes on companies profits are of 30% if I don't make mistake.

He returned to France as a Russian Citizen

No he didn't. First he went to Belgium, like all wealthy French citizens who wants to remain close to France, and within French speaking environment, then he moved to Russia, obtained citizenship, in spite of not speaking Russian (which is supposedly mandatory, but Putin liked the idea), then finally he went to live in Algeria.

edit: personally, I'd like to live in France, I know their taxes are high, but also they have great public health coverage system, and all kind of mechanisms to help you rent apartment if you are low incomes and ~ $1000 guaranteed for you, when you are over 62 or 63 years old. To me, the most important in life is to know you can receive medical cares no matter your income level or situation, and to have a roof over your head.

[graeme_p]

@Dimitri, exactly what my British friends who live in France say. They are financially secure but they are old and they appreciate the health system.

His interest begins and ends in what foreign governments are doing to US companies so yes

Funny however different a politician is supposed to be they always end up being a tool for corporate interests.

This is nothing new. Multi national corporations have been dodging taxes for years.

True, but the tech giants are more global and more blatant. There are plenty of American bricks and mortar retails in the UK, but they do not do things like paying their tax in Luxembourg. Doing things electronically lets you play lots of games with location. Even more so when you are not moving physical goods around - but as Amazon show you can do it even with goods.