G7 finance ministers, central bank chiefs meet as row over France’s digital tax emerges
Finance ministers and central bankers from G7 nations gather today in the French town of Chantilly to discuss a wide range of economic issues.
An emerging row over a French proposal to tax large tech firms will dominate today’s agenda. Last Thursday, France became the first country in Europe to pass legislation taxing these multinational corporations—which include the US giants Apple, Facebook, Amazon and Google. Under the new legislation, services provided by large Internet companies with global sales of over $845 million will need to pay a 3% tax on revenue made within France.
Paris argues that these firms currently exploit local tax loopholes. Opponents claim the tax is a discriminatory trade barrier, with US President Donald Trump even raising the possibility of punitive tariffs in response.
France hopes to garner support among its European allies today, especially the UK, the only other European country in the bloc seriously considering such a tax at the moment.
At least for now, France’s position on the tax leaves it in an isolated position that poses some risk—in Paris’s calculus, the more European countries that adopt the tax the less likely the US will launch another salvo of retaliatory tariffs.
If the European countries attending today’s talks show disinterest in adopting their own versions of the French tax, France will likely move toward supporting a multilateral agreement on the global taxation of digital firms rather than continue to divide its advocacy.
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