The U.S. government on Monday said it may slap punitive duties of up to 100% on $2.4 billion in imports from France of Champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm U.S. tech companies.
The U.S. Trade Representative’s office said its “Section 301” investigation found that the French tax was “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies,” including Alphabet Inc’s Google, Facebook Inc, Apple Inc, and Amazon.com Inc.
U.S. Trade Representative Robert Lighthizer said the government was exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey. “The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies,” Lighthizer said.
The findings won favor from U.S. lawmakers and U.S. tech industry groups, who have long argued that the tax unfairly targets U.S firms. “The French digital services tax is unreasonable, protectionist and discriminatory,” Senators Charles Grassley and Ron Wyden, the top Republican and Democrat, respectively, on the Senate Finance Committee, said in a joint statement.
MacDailyNews Take: As we wrote back in April:
As per the EU itself, the smart approach for Apple et al. is to lobby for harmonized EU taxation over a state-by-state patchwork of taxes, as that will at least offer simplicity, stability, and predictability.