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U.S. 'concern' over French plan to tax tech giants

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Donald Trump ordered the investigation

The U.S. trade representative on July 10 launched an investigation into France's proposed digital tax on companies that provide certain online services to, or aimed at, French users. The move comes in spite of the Trump administration claiming the tax "unfairly targets American companies", and warnings that the U.S. could respond with its own tariffs or trade restrictions.

The French digital services tax would impose a three per cent annual levy on French revenues of digital companies with yearly global sales worth more than €750 million ($1.1 billion Cdn) and French revenue exceeding €25 million ($36 million). USA companies affected included Airbnb and Uber as well as those from China and Europe.

The law may also cover some Indian, British and Chinese firms.

The French Finance Ministry has estimated that the tax would raise about 500 million euros annually (US$563 million) at first - but predicted fast growth.

But France hit back, with its finance minister Bruno Le Maire saying "between allies, we can, and we should, solve our differences without using threats".

"The U.S. can be very creative", Heffner said.

During those protests, Amazon warehouse in the French town of Montélimar was targeted in last November. "For us, (the tax) is totally compliant with global agreements".

But they welcomed a set of proposed measures laid out by the Organization for Economic Co-operation and Development (OECD), a forum for advanced economies.

Google has since defended its global tax payments and said it supports a new "comprehensive and multilateral agreement" on tax.

But OECD said its final stand on digital tax will not come before 2020.

The U.S. Section 301 investigation will determine if the levy poses an unfair trade practice, according to Reuters.

The French government says the tax will end if a similar measure is agreed internationally. Parcels are processed and prepared for dispatch at Amazon's fulfillment center in Peterborough, England, Nov. 15, 2016.

The tax has always been championed by French president Emmanuel Macron as a way to show that governments are capable of taking action to rein in large tech companies, which are seen as paying minimal tax in Europe due to their use of accounting loopholes.

Other EU countries including Austria, Britain, Spain and Italy have also announced plans for their own digital taxes. Perhaps it might even prompt countries to finally agree on some common tax rules (imagine that). ITI represents a number of tech giants, including Apple.

The US is looking into whether the French law, by only imposing tax on large companies and by limiting the types of services subject to tax, targets US companies while excluding French ones.

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