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Mark Zuckerberg, Sundar Pichai and Jeff Bezos.Getty
- Amazon, Facebook and Google are among the largest US technology companies that are preparing to testify against the new Digital Services Tax (DST) in France on Monday after its approval by the French Senate in July.
- The tax is unusual in that it has an impact on income, not on profits. The 3% on The French business figure will affect about 30 companies, mostly US, whose business figure exceeds 750 million euros ($ 831 million), the French Finance Minister said.
- Trump ordered an investigation into the tax in July, which could result in retaliatory tariffs on France, including a tax on the country's wine.
- Several US technology companies have responded by presenting written evidence to support the US government's investigation. Some of these companies will testify at a government hearing on Monday.
- Visit the Business Insider home page for more stories.
The main Silicon Valley actors are preparing to testify against the new French technology tax at the US government hearing on Monday.
Representatives from Google, Amazon and Facebook are ready to plead their case against the tax during the hearing held by the US Trade Representative Office (USTR) in Washington.
A lawyer representing Airbnb, Expedia, Salesforce, Microsoft, Stripe and Twitter, as well as Google, Amazon and Facebook will also appear.
They are among the US technology companies that will be affected by the new Digital Services Tax (DST), which would require companies with revenues of more than 750 million euros ($ 831 million) to pay a tax on sales of 3%. at least 25 million euros (28 million dollars) in France. The tax was approved by the French Senate in July and will apply retroactively from January 1, 2019.
The French Finance Minister, Bruno Le Maire, said that about thirty companies, mainly American, would be affected by the tax and that it could raise more than 500 million euros (554 millions of dollars) a year. This would be equivalent to "justice", he said.
Global technology companies are often accused of finding ways to avoid taxes, and critics say they do so by paying most of their taxes in low-tax jurisdictions where they have their headquarters. Amazon's European headquarters is in Luxembourg, while Google's head office is in Ireland, but that does not necessarily mean that these companies are doing the bulk of their sales in Europe.
Read more: Trump is on the verge of launching a new trade war with France over the plan to foist new giant taxes on US technology companies
In July, Trump ordered an investigation into the proposed tax, which could result in retaliatory tariffs against France, including a wine tax on the country.
In a public notice, the USTR stated that the French tax was "unreasonable" and differed from the norms of the US tax system. He called for the proposal to tax revenue, not profit, and to target US technology companies.
Facebook, Amazon and Google are among the companies that have come forward in presenting evidence in support of the US government investigation.
Peter Hiltz, Director of Policy and Planning for International Taxation of Amazon, said the new tax is "damaging" and "discriminatory" in that it will apply to " a small number of companies almost entirely non-French ", insofar as it only captures companies with incomes. 750 million euros ($ 831 million) or more.
He also said that this would have repercussions on third-party sellers in France, who would now see their fees increase by 3%.
"This tax could hinder the efforts of US SMEs to grow and sell in France because it increases their operating costs.Commercial partners may be forced to choose between raising their prices, reduce ceasing to sell entirely. The additional tax could result in a loss of sales, a reduction in investment and production, or even job losses, "he wrote.
Facebook's global tax policy chief, Alan Lee, said the company was "strongly supporting" the US government's decision to investigate projects in France and added that it would also be complicated for Facebook to comply with the new laws.
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