US and France strike a deal regarding taxing tech giants

Macron and Trump are finally compromising on how to tax Facebook, Google and other American companies operating in France

A compromise has been made regarding the recent issue of France’s actions to tax tech giants operating in the country. At the G7 summit in Biarritz, France, Macron stated that he and Donald Trump have “reached a very good agreement” regarding the controversial tax issue.

France recently passed a bill that would impose a 3% tax on tech companies earning more than €750 million in global revenues and digital sales of €25 million in France. This tax targets mostly big American tech companies such as Facebook and Google, but also affects multiple companies from China, Germany, Britain, and even France. France says the tax is part of their efforts to protect smaller local start-ups.

In a tweet last July, Trump criticized the bill and hinted at countering France’s actions by imposing a tax on French wine imports. Finance Minister, Bruno Le Maire, told Bloomberg that no such thing could happen, stating that “It is obvious when we have a formal and definitive deal we withdraw what was the issue, the section 301, that is the heart of the deal”.

The recent compromise announced at the G7 Summit states that France’s taxation of big tech companies will continue until the OECD can find proper taxation policies for companies that operate on foreign land. France also said that once such a policy is in effect, they will scrap their current 3% tax policy and pay back companies the difference.

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Trump has not yet confirmed that the compromise satisfies him, but he did heap praised for Macron throughout the summit.

Source: Bloomberg, Techcrunch